The product is there. 7 Bt here, 6Bt next door. More up the road and more down the road. The logistics are there. A multi-user railway to a multi-user port. The first leg is only good for 18Mtpa and there are others already using and close to using. Power is there. 40MW down the road and 5000MW within 300kms. The logistics are already priced $26 per tonne to the coast and $33 per tonne to China. The winter down time has been sorted. When the moisture content exceeds 4% the product freezes. This meant either having the carriages sit for 2-3 days at sea level to thaw out or not rail in winter. Now they can dry extra product in summer and blend it into the dried winter product making a sub 4% product.
That takes care of the DSO product $250M CAPEX.
These magnetite projects did not get up because they were too early and the iron ore price dropped way past their breakeven point. New Millennium, M3 and Labrador Iron Mines were all flying and crashed and burnt. There is a DRI market now and it is growing and is becoming the method of choice. To make DRI pellets takes a lot of CAPEX. My estimates are $2B for 5Mtpa, $6B for 16Mtpa and $12B for 100Mtpa. These figures are based on the PFSs of this resource and its neighbours. Capital intensity has to exceed $350/t now.
This company has the potential to deliver for the next 100 years. But it has to show how it will go from barely keeping the lights on to finding $6B of funding. They will need to do this in a clear precise and achievable manner..
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