A group of leading Australian magnetite iron ore companies have joined forces to increase awareness and understanding of the potentially enormous economic and social benefits offered by the magnetite sector. The Magnetite Network (MagNet) was unveiled to an audience of leading Chinese political and steel industry leaders at a conference held by the Australia China Business Council in Beijing late last week. MagNet’s four founding members are Pilbara miners Atlas Iron and CITIC Pacific Mining, plus the MidWest’s Extension Hill and Karara Mining, the joint venture formed by Gindalbie Metals and China’s AnSteel Group.
MagNet Executive Director Megan Anwyl said the Australian magnetite industry stood to generate billions of dollars in export revenue, enormous royalties which would help pay for vital State Government services such as hospitals and schools, as well as thousands of direct and indirect jobs. “The development of WA’s large-scale magnetite projects have the potential to deliver massive gains to Australia; not least is the significant infrastructure investment that for our member companies alone totals more than A$9.6 billion,” Anwyl said.
“With an estimated 8,600 new jobs in the construction phases as well as annual export revenue in excess of A$6 billion, we think the importance of the magnetite projects are crucial to Australia’s long-term iron ore industry. While the global magnetite industry is very well established, with large-scale projects in the USA, China, Europe and New Zealand, it is relatively new here in Australia, where it accounts for less than 3% of total iron ore produced, with hematite ore making up the rest.
“It’s also important to understand that the jobs multiplier effect is massive because the whole value adding process is so intensive – for example, the huge numbers of steel balls in mills that are made in Australia will generate extra jobs for Australians in the manufacturing sector. This is in addition to the operational jobs on site at the mines,” added Anwyl.
One of MagNet’s key objectives will be to educate and inform Australians about the potential benefits of magnetite mining. It will also seek to play a pivotal role in shaping government policy and regulatory outcomes, including:
- The provision of appropriate social and economic infrastructure solutions
- Securing suitable energy supplies to ensure sustainable production
- Climate change outcomes in light of the Carbon Pollution Reduction Scheme (CPRS) and the benefits of Australian magnetite in delivering a net global reduction in carbon per tonne of steel produced.
While the processing of low-grade magnetite ore into magnetite concentrate creates higher carbon emissions when compared with hematite products in the early, energy intensive phase, the carbon emissions saved from the use of magnetite concentrate later in the process – as a feedstock to the steelmaking process – more than offset this increase. Effectively, this provides a net global reduction in carbon emissions per tonne of steel compared with hematite ore.
“Many people wouldn’t realise that along with all the other socio-economic benefits and value adding that occurs with onshore magnetite mining and processing, it also provides this net global carbon reduction effect, mainly due to the more efficient nature of downstream processing which takes place in Australia,” Anwyl said. “Magnetite mining in Australia is essentially a win-win in both an economic and environmental sense.”
The Magnetite Network (MagNet) comprises a group of companies with prominent West Australian projects and a shared interest in the mining and processing of magnetite ore in Western Australia. These companies are aiming to produce high-grade, high-quality magnetite concentrate to be used in the production of steel. All the member companies are exploring and developing large-scale magnetite projects in the Pilbara or Midwest regions of Western Australia, representing a potential multi-billion dollar industry.
Magnet’s core objective is to raise public awareness of the emerging magnetite industry, which will be a significant economic contributor to Australia in terms of infrastructure investment and royalties as well as creating thousands of jobs. Onshore magnetite mining has a higher multiplier effect than traditional direct shipping iron ore production due to the immense value adding phase of the production and concentration process – in effect leading to additional direct manufacturing jobs.
Another priority for MagNet is to ensure the Federal Government’s Carbon Pollution Reduction Scheme (CPRS) recognises magnetite as an emissions-intensive trade-exposed (EITE) industry. The Magnetite Network aims to assist the fledgling WA magnetite industry achieve EITE status to ensure its longevity and commercial certainty. Magnetite producers can help reduce overall global carbon emissions yet remain competitive in the world market.
Atlas Iron commenced hematite production and exports from its 100% owned Pardoo DSO Project, in late 2008. Atlas also wholly-owns the Ridley magnetite deposit. This 2,000 Mt magnetite resource is located 75 km east of Port Hedland. Atlas is moving to its next phase of growth through the development of a portfolio of high quality iron ore projects within its extensive 8,900 km2 Pilbara landholding, targeting production growth at an annualised rate of 6 Mt in 2010, 9Mt in 2011 and 12 Mt in 2012 and has secured port capacity at Port Hedland’s inner harbour.
CITIC Pacific Mining is currently developing its Sino Iron Ore Project, located about 100 km southwest of Karratha. The project has over 2,000 Mt of identified magnetite iron ore resources and when fully operational will export about 28 Mt of a mix of magnetite concentrate and pellets each year. The company will combine Australian mining knowledge with the expertise and skills in magnetite processing of Chinese and other world leaders in this field. This provides an excellent opportunity for Australia to benefit from exposure to international skills and processing technology.
Extension Hill (formerly Asia Iron Holdings) is currently developing its Extension Hill Magnetite Project at Mt Gibson in the MidWest, situated approximately 290 km north of Perth. Extension Hill contains a resource of 240 Mt of magnetite, with an independently assessed exploration potential of 3-5,000 Mt of ore evidenced by drilling and geophysical modelling. The company plans to export its first shipment of iron ore in late 2011.
Karara Mining is a 50:50 Joint Venture between Gindalbie Metals and AnSteel Group, one of China’s leading steel and iron ore producers. The Joint Venture is developing the Karara Iron Ore Project, located 225 km east of Geraldton in the Mid West, Karara Mining is on target to produce high-grade magnetite concentrate and blast furnace quality pellets in 2011.
Gindalbie has commented on today’s report on the front page of The West Australian and is pleased to announce that it supports the feasibility study surrounding a steel mill proposal for the Mid-West region.
During last week’s visit to China, WA Premier Colin Barnett, signed an agreement with Gindalbie’s joint venture partner, Ansteel, to conduct a feasibility study into an integrated iron and steel plant and rolling mill at the Oakajee industrial estate near Geraldton. Barnett’s visit to China, during which he met directly with AnSteel President Zhang Xiaogang highlighted the support of both the WA Government and Ansteel for the development of the Karara project. Barnett also inspected AnSteel’s new Bayuquan steel mill at the Port of Yingkou in northeast China, which has been designed to use Karara products as a key feed source.
Gindalbie also notes the ongoing support shown by Barnett during the China tour for the development of Oakajee Port. The successful development of the new deepwater port, 30 km north of Geraldton, will underpin the ability of Karara to expand from its planned 8 Mt/y start-up to fulfill its long term potential of producing more than 30 Mt/y for a mine life of more than 30 years.
Gindalbie Managing Director and Chief Executive Officer Garret Dixon said Ansteel’s commitment to a feasibility study was an extremely exciting development for the Karara Project, which has offtake arrangements to supply Ansteel’s vast Chinese operations. Ansteel has invested A$573 million into Gindalbie and the Karara Project.
Following last week’s successful environmental appeal outcome, construction on-site at Karara is expected to start in the December quarter, with first production of hematite scheduled for the end of next year, and magnetite concentrate by mid-2011.
Dixon said the multi-billion tonne Karara orebody could comfortably underpin annual production of 30 Mt/y for a mine life of more than 30 years, giving it ample scope to become a major exporter of iron ore concentrate while also supplying feedstock for a WA-based steel mill.
“Änsteel has recognised the high quality of the Karara iron ore with its decision to invest heavily in the project,” Dixon said. “Now, this agreement with the WA Government highlights the benefits for Gindalbie of having a large strategic shareholder and partner with whom we can pursue further opportunities for iron ore processing and value-adding. Gindalbie is delighted that Ansteel is now proceeding with a feasibility study into a steel mill at Oakajee.”
“This project could provide another major market for Karara’s iron ore, in the process underpinning further expansions and production increases. Gindalbie wishes Ansteel and the WA Government every success with this study and offers its full assistance to the Project, which stands to generate substantial benefits for Ansteel, Gindalbie and the overall WA economy.”
