Gindalbie Metals has announced the award of the magnetite ore mining contract for the Karara iron ore project in Western Australia to Downer EDI Mining. With a total estimated value of approximately A$570 million over a duration of six years, the contract is one of the largest single operational contracts for the Karara project. The contract, which includes provision of drill & blast and load & haul services, is based on a mining rate of approximately 30 Mt/y. This will comprise approximately 20 Mt/y of ore and 10Mt/y of waste for the production of 8 Mt/y of dry magnetite concentrate, the Stage 1 production rate at Karara.

Partial pre-stripping of the main Karara magnetite orebody commenced earlier this year as a result of trial mining operations focusing on near-surface haematite ore at Karara South and Karara East. Full-scale pre-stripping of the main magnetite orebody is scheduled to commence in early 2012. Mobilisation and establishment on site will commence immediately. Personnel required for the contract will mobilise throughout 2012 with ore production set to ramp up over the course of the year in line with the commissioning schedule and ore delivery requirements of the Karara concentrator.

Gindalbie’s Managing Director, Tim Netscher, said the award of the open pit mining contract was a major milestone for the Karara project, representing one of the single largest operational contracts to be let ahead of the start of commissioning later this year. “The start of open pit mining will see the beginning of another huge transformation for the Karara site as development of one of the largest open pits in Western Australia commences. With the final pit measuring 3 km long, 800 m wide and 300 m deep, in time the Karara pit will be of a similar size to other large mining pits in Western Australia , such as the Super Pit in Kalgoorlie. We are delighted to have forged a partnership with one of Australia’s most experienced and accomplished open pit mining groups in Downer EDI Mining for the initial magnetite mining contract.” The contract will employ around 120 personnel and require the mobilisation of two hydraulic shovels, nine large capacity ore haulage trucks, drill rigs and numerous items of support equipment.