Ann: Joint venture to propel Marillana into early production, page-42

More relatively recent history/editorial analysis from AFR July 2018)
This story goes into Mineral Resources’ moves to secure the SouthWest Creek port at Port Hedlandaround the same time as it’s failed Atlas bid .
https://www.copyright link/business/mineral-resources-pulls-off-deal-with-brockman-20180727-h137ep


“MinRes sets sail with Brockman iron ore deal

By Brad Thompson
Updated 27 Jul 2018 — 4:05 PM, first published at 9:29 AM

Chris Ellison's Mineral Resources has strengthened its claim to prized export capacity at Port Hedland after pulling off a deal with Brockman Mining aimed at supplying iron ore to its proposed light rail network and Cape-sized berth development.

The joint venture will unlock iron ore from Brockman's long-stranded Marillana project. It will also help to underpin MinRes' core mining services business as well as its plans to invest $1.4 billion to $1.6 billion in the Pilbara Infrastructure Project.

The deal appears a major blow to New Zealand's Todd Corp and its Balla Balla infrastructure project, which included plans for a 160-kilometre railway linked to a new export facility between Karratha and Port Hedland, with Brockman walking away from a non-binding term sheet for farm-in and joint venture co-operation.


Chris Ellison has secured a deal with Brockman Mining that will feed iron ore into Mineral Resource's proposed rail and berth project.

It is also a blow to any plans Andrew Forrest's Fortescue Metals Group had to prevent more lower-than-premium grade iron ore coming on to the market after Fortescue played a part in thwarting the MinRes takeover bid for Atlas Iron.

Brockman said that the Marillana ore body would be able to produce a beneficiated, or upgraded, product grade of at least 60.5-61.5 per cent from a total mineral resource of 1.51 billion tonnes and including ore reserves of 1 billion tonnes.

Fresh from defending its disclosure record, MinRes announced on Friday that the Marillana joint venture was targeting initial production of 20 million tonnes of iron ore a year, with potential to increase the production capacity to 30 million tonnes a year.

It estimated the cost of mine development, non-processing infrastructure and utility assets at $300 million, with costs split between the joint venture partners.

Brockman project development director Henrianto Tee said there were obvious synergies in the joint venture developing the Marillana project, which is about 30 kilometres from MinRes's existing Iron Valley operations.

Mr Tee said Brockman and MinRes had been talking in earnest about the deal, which in simple terms gives MinRes a 50 per cent stake in Marillana if it builds the light rail network and associated berth, since April.

He said it offered Brockman a faster route to market than the Balla Balla project, with forecasts the joint venture could be trucking ore for export from the existing MinRes berth space at Utah Point by the second half of next year and that the new berth could be operational by the second half of 2020.

Subject to both parties meeting certain conditions for the joint venture to go ahead, MinRes will secure a life-of-mine mining services agreement whereby it will build, own and operate the crushing and beneficiation plant, a stockyard and train load-out facility.

MinRes will also have a life-of-mine "mine-to-port transport and ship loading" agreement.

Mr Ellison has always maintained that his plans to build a 320-kilometre-long light rail system and Cape-size berth at South West Creek in Port Hedland's inner harbour were not dependent on the ultimately unsuccessful bid for Atlas Iron.

"Both companies (MinRes and Brockman) recognise that MinRes is firmly on track to commence construction of its Pilbara Infrastructure Project by the middle of 2019," he said on Friday.

MinRes is in negotiations with the Pilbara Port Authority on developing a berth adjacent to Gina Rinehart's Roy Hill export facilities and expects to secure a state agreement on the rail project before the end of the year.

Redstone, a subsidiary of Mrs Rinehart's Hancock Prospecting, inched closer to securing Atlas on Friday when its $390 million bid was declared unconditional.

However, Fortescue holds a 19.9 per cent stake in Atlas and on Thursday chief executive Elizabeth Gaines refused to rule out making a rival bid.

Hancock chief executive Garry Korte highlighted Atlas's dire financial position on Friday in urging shareholders to back the Redstone bid.

"Now that our offer is fully unconditional, Atlas shareholders who accept into the offer will be paid within seven days for their shares, further improving our already compelling offer," he said.”