Yes this refers to Western Australias magnetite but an interesting read and also shows the growing interest in this ore. Never a bad thing to seein the press.
There’s a new plan to unlock a magnetite mining hub in WA’s Mid-WestFor almost 50 years, attempts to ‘unlock’ WA’s Mid-West magnetite iron ore province have failed.
Distance from port, and a lack of supply of water and energy made costs prohibitive for aspiring miners. The magnetite operations that did manage to get up and running generally performed poorly.
(There are two main types of iron ores – hematite and magnetite. Hematite is a higher grade in the ground, while magnetite deposits are large and quite low grade – but produce super high-grade products.)
Most recently, plans for a ~$10 billion rail system and deep water port called ‘Oakajee’ near Geraldton proved unviable as soon as iron ore prices retreated from their 2011 peaks.
Numerous high quality magnetite deposits in the region remain stranded, but small cap engineering service provider Verbrec (ASX:VBC) believes it has the answer.
Backed by heavy hitters like miner Anglo American and gas infrastructure owner AGIG, as well as private iron ore play and foundation shipper Cashmere Iron, Verbrec has developed a plan to unlock the vast magnetite iron ore deposits in the Mid-West.
An infrastructure fund would own everything outside the mine gate — gas pipelines, water pipelines, power, export hydro-transport pipelines and shallow water transhipping port, which mining companies would utilise for a fee.
Verbrec themselves would benefit from major project engineering work and possible long term operations and maintenance contracts.
A pre-feasibility study (PFS) on the initial 30 million tonnes per year project will kick off late Q4 FY2021.
“By working with AGIG we are treating this like a huge utilities project. We supply the miner everything they need – power, natural gas, water, and take away their ore for export,” says Verbrec’s Brian O’Sullivan, who first sketched out this idea with colleague Ian Gooding in 2014.
“It’s just like a utilities business, but on a grand scale.
“The shared infrastructure is crucial. If one miner tries [to go it all alone] it is completely uneconomical.
“We engaged with all the miners and project developers in the Mid-West. Cashmere has engaged with us as a foundation shipper for the first 30 million tonnes.”
In that region there are another five main proponents with advanced projects, O’Sullivan says.
But previous attempts to unlock this iron ore province have failed. How is this plan any different?
Firstly, the plan utilises slurry pipeline technology to transport the iron ore rather than rail – which is much, much cheaper to build and operate, O’Sullivan says.
“The second thing is instead of building an $8 billion deep-water port at Oakajee we are using small harbour technology,” he says.
“You can very cheaply put in a small harbour with shallow draft feeder vessels. These vessels are loaded directly [with ore] and run straight out to what we call a ‘floating harbour’.
“The ocean-going vessels come alongside, latch to the floating harbour, are loaded quickly and are off.
“That works really well up to about 90 million tonnes [per annum].”
Importantly, this project doesn’t need high iron ore prices to be viable. At $US80/t it’s very robust, O’Sullivan says.
“We all know that $US230/t is not going to last,” O’Sullivan says.
“Intuitively I know that we can sustain a very low ore price, but as part of the PFS we will validate how low prices can go.
“We are going to build this project, because it makes sense. We don’t need $US230 per tonne iron ore price to make this work.”
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