Iron ore miner Roy Hill Holdings has officially taken control of its mine, rail and port operations in the Pilbara from lead construction contractor Samsung C&T, with the company now commencing ramp-up of production to target the nameplate 55 million tonnes per annum capacity.
The original deadline for handover in the contract between Samsung and Roy Hill had reportedly been September 30 last year.
The project had faced delays however, including commissioning problems in December that meant its first iron ore shipment was pushed back.
Samsung won the role as head Roy Hill contractor with a bid of just less than $US6 billion in April of 2013, and it is believed the company may have made a significant loss.
That has led to pressure on other contractors, such as NRW Holdings, with Samsung and NRW engaged in a legal dispute for most of the second half of last year, resulting in NRW winning a $30 million settlement.
Roy Hill chief executive Barry Fitzgerald said he thanked Samsung C&T and other contractors, in addition to the 50,000 workers who had been involved in the project.
“Roy Hill is a long-term operation, with a long-term outlook,” he said.
“We are a low-cost producer, with low phosphorous impurities, significant lump ratio, consistent quality and with approximately 90 per cent of Roy Hill’s quality product already under long term contracts.
“Roy Hill will deliver considerable benefits to the Western Australian and Australian economies for many years to come.”
The company will be under immediate pressure to reduce costs, with iron ore selling at $US45.73 per tonne last night.
Roy Hill is 70 per cent owned by Gina Rinehart's Hancock Prospecting.
The remaining 30 per cent is owned by a consortium including Posco and China Steel Corporation.
