I wonder where ARH fits in Clives plans.QUEENSLAND billionaire...

I wonder where ARH fits in Clives plans.

QUEENSLAND billionaire Clive Palmer, apparently undeterred by the breakdown of talks with China's Shougang over development of the Balmoral South magnetite iron ore project, has flagged an ambitious plan to produce 165 million tonnes of magnetite a year from his ground in Western Australia's Pilbara region.

Mr Palmer's private company, Mineralogy, has lodged documents with the federal environMent department kicking off the approvals process to more than double production capacity from his tenements in the region from the 72 million tonnes already approved or in the process.

The first iron ore concentrate from Mr Palmer's deposits is expected next year from the $US3.85 billion Sino Iron project, which is being developed by Chinese-owned Citic Pacific and has approval to produce 28million tonnes of magnetite concentrate and 6 million tonnes of pellets a year. Balmoral South, where the approval process is under way for 24 million tonnes of concentrate and 14 million tonnes of pellets a year, is seeking new partners after Shougang earlier this month stopped project-funding talks with operator Australasian Resources, Mr Palmer's ASX-listed company.

Illustrating the scope of Mr Palmer's ambitions, BHP, by comparison, produced just under 125 million tonnes of iron ore in the Pilbara last financial year.

And while Rio Tinto, BHP Billiton and Fortescue's hematite ores need little processing, magnetite ore requires extensive and power-intensive grinding; it also needs to be concentrated, making it more expensive.

The next three stages, an expansion of Sino Iron to production of 50 million tonnes of concentrate a year and two other projects, are slated to come into production in 2016 and 2017.

"Although the market has contracted in response to the global financial crisis, the long-term demand for iron ore is not likely to change as China and India are continuing to urbanise," Mineralogy said in its filing.

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