just a refresher

Mineralogy is a large, privately-owned company based in Brisbane that is reputed to hold land containing resources of around 140 billion tonnes in the Pilbara region.

"We have actually got more ore in the ground than Rio (Tinto) and BHP (Billiton) combined," said organisation's head, Brisbane-based Clive Palmer.

With deals signed that will see up to three billion tonnes of iron ore mined from the Mineralogy deposit, the company's head, Brisbane-based Clive Palmer, is considering his options for the remaining resources.

“With $15 billion in capital costs for the Chinese project and $2 billion in capital for Australasian Resources' project, it's really a matter of how quickly the Western Australian economy can absorb them and for them to move into production,” said Palmer.

When asked whether there will be further deals with China, he said, “I think it's open to the world at the moment…the situation is changing…iron ore that's low in phosphorous is in greater demand. Our ore body is the ideal material for blast furnaces, producing a 71 per cent concentrate.”

Mineralogy is in receipt of $US215 million from China's CITIC Pacific for one billion tonnes of ore from the Balmoral deposit. CITIC intends to develop a pellet plant and port at Cape Preston in WA, with a second operation to be developed in the following years.

The deal is also a milestone for junior miner Australasian Resources, which made an agreement with Palmer, in August, to purchase one billion tonnes of magnetite ore for its own operation. It intends to kick-start its own operation on the heels of CITIC and will use the proposed port at Cape Preston to ship its product.

Australasian's market cap was $120 million at the time of writing, but with shares being released to Palmer in October it could have a theorectical market cap of more like $600 million.