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https://www.theaustralian.com.au/bu...b/news-story/177480f50e3186c385741f32a42d2403

MinRes considers how to fund iron ore project Ashburton Hub

An excavator loads ore into an autonomous dump truck. Picture: Brendon Thorne/Bloomberg via Getty Images

• 2 HOURS AGO MAY 22, 2022

The $11bn-plus Mineral Resources is thought to be giving creative thought as to how it funds its Ashburton Hub, an iron ore mining project that is set to cost as much as $2.55bn.

There had been talk the group was thinking about a sale of part of the project in the Pilbara, but this was dismissed by the company on Friday.

Yet experts in the market believe the group needs to give thought to the project’s enormous funding requirements.

A sale and leaseback of its haulage services over the long term could make sense.

The challenge, though, is that should MinRes be the only user, the assets would need to remain on the group’s balance sheet, which would not create a lot of benefits from an accounting perspective.

There is also the cyclical nature of the iron ore market that may make luring an investor keen on low-risk returns tricky.

MinRes, led by Chris Ellison, told the Macquarie Australia conference in Sydney this month that its Ashburton Hub was being developed with joint venture partners Baowu, AMCI and POSCO to create a 30 million tonnes per annum capacity facility with a mine life of at least 30 years.

The mine is expected to cost between $2.4bn and $2.55bn. It is expected to start operating in December next year.
It’s a big cheque for the listed iron ore and lithium producer.
Another challenge is that it needs to gain approval for its road haulage trucks to travel through the farm of Fortescue Metals boss Andrew Forrest, so negotiations are expected to be long and protracted.
Dr Forrest owns the pastoral lease to the property.

Construction on the project was due to start in August last year, but it has been delayed.
It will consist of a port and tranche shipping operation as well as a semi-automatic long road train that MinRes has been looking to build for some time.

MinRes says a final investment decision is expected next month.

The company also has the Pilbara Hub iron ore project it jointly owns with Brockman.