Mineral Resources has mapped out ambitious growth plans that would see the company producing more than 90 million tonnes of iron ore per year.
Mineral Resources has mapped out ambitious growth plans under which the company would produce more than 90 million tonnes of iron ore per year.
That represents a huge increase from the 14mt the company shipped in the year to June 2020.
Managing director Chris Ellison mapped out his growth plans at today’s annual shareholder meeting.
“We believe without any doubt that over the next two-and-a-half to three years, we are going to double the entire MinRes business,” Mr Ellison said.
“That’s doubling revenue, probably the number of people we employ, the tonnes we shift, and more importantly doubling the bottom line.”
Mr Ellison presented growth plans that indicate iron ore production will actually grow about six-fold.
The increased mining volumes will allow MinRes to generate more revenue in its mining services operation, which Mr Ellison said was the main focus.
“The strategy is to own and operate long-term sustainable infrastructure,” he said.
Mr Ellison said haul roads and port facilities that MinRes planned to develop would provide a pathway to market for ‘stranded’ assets.
In the Yilgarn region, the company has built 130 kilometres of private haul roads during the past 12 months.
Mr Ellison said he was aiming for production of 13mtpa for at least a decade from its Koolyanobbing and Carina operations.
In the Pilbara, it is aiming to increase shipments through Port Hedland’s Utah Point to 14mtpa by February next year.
Mr Ellison said the company was mining five deposits now, and that may grow to six or seven.
One likely new mine is Wonmunna, which it recently agreed to buy from Australian Aboriginal Mining Corporation.
“They had some unfortunate experience over the last five years, they weren’t able to get it going with their JV partner,” Mr Ellison said.
“They were getting in serious financial trouble, we bailed them out.”
He insisted MinRes still had a good relationship with Carey Mining boss Daniel Tucker, who resigned from the AAMC board after it agreed to sell the mine.
“There was no falling out with Daniel whatsoever,” Mr Ellison said.
“Our relationship with them is as good as ever.
“From my understanding, he did not vote against what they are doing.”
Mr Tucker had been aiming to develop Wonmunna as Australia’s first Aboriginal owned and run mine, with support from JV partner Fortescue Metals Group.
MinRes is targeting production of 5mtpa from Wonmunna.
The company’s third hub will be in the Ashburton region, inland from Onslow.
Its plans include the construction of 200km of private haul roads, along with an airport, accommodation, and two 15mtpa process plants.
“We will be able to produce a minimum of 25 million tonnes per annum run rate out of there, and we are aiming to have that in about two years,” Mr Ellison said.
MinRes also plans to build a 350,000 tonne storage facility on the coast south of Onslow, and build, own and operate three or four trans-shipment vessels that will transfer ore to Cape-size carriers moored offshore.
Mr Ellison affirmed MinRes was also aiming to develop two Cape-class carrier berths at Port Hedland’s South West Creek, with capacity of 40mtpa.
He said a plan had been submitted to the state government and was awaiting final sign-off though he conceded this may not happen before the March state election.
Mr Ellison noted that berths three and four at South West Creek had been allocated in 2008 to ‘junior’ miners.
“They all disappeared except us,” he said.
“We are the only organisation left that meets the criteria of the policy and we are the only emerging iron ore producer that has the balance sheet and the financial clout to be able to deliver those.”
The proposed Marillana mine has been earmarked to supply the new berths.
Mr Ellison told journalists the company expected to deliver all the growth projects, which have collective output of 92mtpa.
“They will all eventually turn out those tonnes in three to five years,” he said.
Mr Ellison said the company’s proposed infrastructure solutions would be efficient.
These include using 300t roadtrains on its private haul roads.
Mr Ellison said these were one-third the cost per tonne kilometre of on-highway road trains and were close to the total cost of railway haulage, if the cost of building the rail track was included.
His aim was to have driverless road trains on private haul roads in a couple of years.
Mr Ellison told shareholders that a major focus was switching to clean energy.
This meant cutting the sue of diesel in favour of gas, solar and eventually hydrogen.
He was also full of praise for the state government’s COVID response.
“We have the best economic and social outcome anyone could wish for.
“I encourage Mark McGowan to keep on running the place exactly the way he has.”
