Fortescue breathes life into Oakajee dream
Peter Ker Resources reporter Jan 21, 2022 – 5.55pm
Fortescue Metals Group wants to breathe life into Western Australia’s long stalled Oakajee iron ore project and has struck a partnership with the Chinese owner of the scheme.
Fortescue announced it may acquire half of a magnetite iron project and 100 per cent of the infrastructure companies that have long aimed to support an iron ore mining province in the mid-west region.
The mine and infrastructure projects are owned by an Australian subsidiary of Chinese state-owned steel maker Sinosteel, which consolidated ownership of the Oakajee province in October 2019 when it acquired the interests of Japanese giant Mitsubishi.
Invited by Sinosteel subsidiary
But with its Chinese parent proving tight on the purse strings, the local Sinosteel subsidiary has invited Fortescue to help on the project under a memorandum of understanding that envisages the parties spending 12 months studying the projects.
Fortescue’s acquisition of the mine and infrastructure projects will be subject to those 12 months of study.
Oakajee was big news in the resources sector a decade ago, when the WA government tried valiantly to create a new iron ore province in the mid-west to rival the Pilbara.
The plan was to build a new deepwater port at Oakajee, north of the rural city of Geraldton, and build almost 500 kilometres of railway to connect the port to numerous mines inland.
While there is some high grade iron ore in the province, much of the material is lower grade magnetite, which requires energy-intensive processing to create a saleable concentrate product.
Solar-powered magnetite processing
Production of the concentrate was expensive a decade ago and the dream of building an iron ore province near Oakajee faded when iron ore prices turned south in 2012.
But Fortescue’s interest in producing magnetite concentrate has revived over the past four years in the belief that low-cost solar power could make the energy-intensive aspect of magnetite processing more affordable.
Magnetite concentrates tend to have iron grades close to 70 per cent, meaning they are expected to be hotly sought after by steel mills in future as they seek to reduce emissions and improve efficiency.
Fortescue is building its own $US3.3 billion to $US3.5 billion magnetite concentrate project in the Pilbara at Iron Bridge and chief executive Elizabeth Gaines said the company was open to doing more in the mid-west.
“We look forward to working with Sinosteel on the next steps for this important project for Western Australia which, in addition to the magnetite and infrastructure development, offers the opportunity for a co-ordinated project combining Fortescue’s iron ore and infrastructure pedigree with Fortescue Future Industries’ green energy objectives,” she said.
“Future development including a renewable, green hydrogen hub in the mid-west region at Oakajee would deliver a large-scale resources and renewables project for Western Australia, further underpinning our enduring relationship with China.”
Sinosteel president Andong Liu said Fortescue’s clean energy ambitious would be at the forefront of the studies conducted over the next year.
“This world-class project is reflected not only in the scale of resources, ore processing characteristics and product quality, but also in the huge renewable energy potential. Today, we are pleased to welcome our new partner in this visionary path, Fortescue,” he said.
This is more exciting than the questionable Mbalam/Nabeba project, where ANS's interests and ROI have [still] not been defined, and a massive cloud hangs overhead regarding many issues, such as the $100M placement that expired 3 weeks ago. What is ANS actually bringing to the table?
To provide some perspective on proximity, a map of Sinosteel's interests;
If ANS can obtain access to port and rail at a fair price, you would have to consider the possibility of trucking our Peak Hill ore to the FMG/Sinosteel infrastructure.
Some GMaps to show possible trucking routes to the nearby Sinosteel interests.
Exciting times?
