Preliminary approval for Mid West mine

Mount Gibson Iron has received preliminary Environmental Protection Authority approval for development of its Iron Hill deposits north-east of Dalwallinu, although there is still some process to go before work can begin.

The deposit is just three kilometres from the existing Extension Hill mine site, which is expected to be depleted in the second half of 2016.

That would mean work at Iron Hill could be conducted at a low capital cost.

A spokesperson for Mt Gibson said the approvals were encouraging but would be subject to comments and appeals, with the final decision resting with the environment minister.

The company hopes to be able to start work at the deposit when sales from Extension Hill finish up early next year, although there are other Department of Mines and Petroleum approvals required.

The EPA recommendation will be open for public comment for two weeks.

With an the iron ore price of US$57.70 per tonne as of this morning, capital investment into mining of the commodity has tailed off dramatically in the past two years.

Today’s approval comes about six weeks after Rio Tinto received approvals for two iron ore expansion projects valued at around $357 million.

That was for brownfields extensions at Yandicoogina and West Angelas.

Mt Gibson was 2 per cent higher to 32.7 cents per share at the time of writing.