arh to start pilbara mine in 2012

Australasian Resources to start Pilbara mine in 2012


London 23 June 2008 12:05
Junior mining company Australasian Resources will start production at its Balmoral South Iron Ore Project in the Pilbara region of Western Australia in January 2012, the company said in a statement to the Australia Stock Exchange.

China’s Shougang Group, which owns around 12.8% of Australasian Resources, has the option to acquire 50% of the Balmoral project by providing 100% of the funding through an interest free loan; guaranteeing the purchase of 100% of the iron ore products from Balmoral; or by taking responsibility for the construction of the project.

The Chinese steelmaker has three months to finalise its investment decision.

The 12 million tpy project, of which 7 million tpy will be pellets, will require a capital injection of A$2.7 billion ($2.6 billion). The mine is expected to produce magnetite ore with 30% Fe content. Australasian Resources has mining rights that allow for up to 1 billion tonnes of ore.

The recently completed feasibility study includes plans to build a concentrator with a 12 million tpy capacity, of which 5.2 million tpy will be exported, and a 7 million tpy pellet plant. Construction of the mine is due to start in January 2009.

It is expected that Shougang will propose the pellet plant to be located in China, Australasian Resources said.