Aspiring iron ore miners Flinders Mines and Rutila Resources have joined forces, with backing from private New Zealand company Todd Corporation, to assess the development of an integrated rail and port project in the Pilbara.
Aspiring iron ore miners Flinders Mines and Rutila Resources have joined forces, with backing from private New Zealand company Todd Corporation, to assess the development of an integrated rail and port project in the Pilbara.
Rutila and Todd will jointly assess the construction of a 200 kilometre railway to Flinders' proposed central Pilbara mine.
The railway would link to a new transhipment port at Balla Balla, located east of Cape Lambert, with the raiway and port having a combined cost of $2.2 billion.
The plans build upon work Rutila and Todd have already undertaken for development of the Balla Balla iron ore project, located close to the coast.
Rutila and Todd have been working on a transhipment concept that would be substantially cheaper than building a traditional port.
It involves the use of smaller vessels to transfer ore onto large bulk carriers moored at sea, removing the need for large-scale dredging near the coast.
Perth companies Mineral Resources and Iron Ore Holdings are also working on plans for transhipment facilities in the Pilbara, as they seek low-cost export solutions that are not constrained by gaining access to the established ports.
The new venture adds to Todd Corporation’s substantial investments in WA-based resources companies.
It is already Rutila’s major shareholder and has a direct 32 per cent stake in the Balla Balla project.
It was announced today that Todd will invest a further $10 million in Rutila, in the form of a convertible loan.
Todd is also a shareholder in Wolf Minerals, which is developing the Hemerdon tin project in England.
Rutila and Todd, through their Balla Balla joint venture, have been working on a port facility with a capacity of 6 to 10 million tonnes per annum, costing an estimated $370 million.
The new agreement envisages Flinders exporting 25mtpa through the same port.
An expanded port, with a capacity of 45mtpa, would cost $686 million.
Studies commissioned by Rutila show the 200km railway from Flinders iron ore deposit to the coast would cost $1.54 billion to develop.
If the proposed developments come to fruition, Flinders will reimburse all operating costs for the rail and port facilities, plus pay a net $20/tonne of ore handled, plus 30 per cent of revenue from ore sales above $60/tonne.
As well as the planned infrastructure investment, Flinders' proposed mine would cost up to $1.2 billion to develop while the Balla Balla mine would cost about $650 million.
Flinders described the alliance agreement as a game changer, allowing the company to develop its 917mt iron ore deposit.
Chairman Robert Kennedy said the allaince "breaks the deadlock that we have faced in having stranded high quality assets without access to rail and port services".
Rutila chairman Nicholas Curtis described the alliance as an innovative solution among junior miners to unlock efficient export solutions.