australia's wpg closer to key approval

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Australia's WPG closer to key approval for Port Pirie iron ore storage

Melbourne (Platts)--18May2011/104 am EDT/504 GMT

South Australia's Development Assessment Commission has recommended minister's approval for WPG Resources' plan to build a 7 million-8 million mt/year iron ore storage and export facility at Port Pirie, the iron ore developer said Wednesday.

The facility will enable WPG to handle exports from its Peculiar Knob iron ore project, which is due to start production in the second half of 2011.

WPG's application was lodged with the commission in November 2010. It was later amended after concerns were expressed during a public submission process to include the construction of a new rail overpass to ensure 24-hour access to Nyrstar's adjacent lead smelter, additional soundproofing of the storage shed and environmental remedial work, WPG said in a statement.

The A$7 million ($7.4 million) cost of the additional work will be funded from WPG's existing cash reserves and loan facilities, the company said.

Providing the minister accepts the commission's recommendation "as expected," WPG requires only federal environmental approval and state government approval of its mine rehabilitation plan to start construction at Peculiar Knob, the company said.

"WPG anticipates these approvals will become available within the next two months," the company said in the statement. WPG bought the vacant parcel of land for the storage facility in August 2010 from state-owned Land Management Corporation after securing access to nearby Berth 7 at Port Pirie on June 30 to export iron ore and coal for an initial period of 10 years, with the option to extend for up to 30 years.

The company targets Peculiar Knob producing around 3.3 million mt/year of iron ore from H2 2011.

The additional port capacity would be made available to other users and also provide port access to WPG's other proposed iron ore and coal projects in the state, WPG said earlier.

Peculiar Knob, 770 km northwest of Adelaide, has a certified resource of 19 million mt of ore at a grading of 63.7% iron. WPG says it is the highest grade undeveloped DSO iron ore deposit in Australia.

--Wendy Wells, [email protected]