Mining News.com.au 13/9/06GINDALBIE Metals will build the pellet...

Mining News.com.au 13/9/06
GINDALBIE Metals will build the pellet plant for its Karara iron ore project in China, a move that is set to deliver a 50% capital cost saving to the company.

Gindalbie and its Chinese joint venture partner at Karara, Anshan Iron and Steel Group (AnSteel), announced today they would develop a 4 million tonne per annum pellet plant for Karara near a major new steel mill set to be built by AnSteel in northeastern China.

Karara, which is situated in the Mid-West region of Western Australia, has targeted production of 10Mtpa of iron products including hematite, magnetite concentrate and pellets.

According to Gindalbie, the JV partners found they would save 50% by building the plant in the Chinese port city of Yingkou, as opposed to constructing the facility in Geraldton.

"This configuration will not only enhance the overall economics and financial returns from the Karara Project but may also lead to an earlier development schedule," Gindalbie chairman George Jones said this morning.

AnSteel's new 5Mtpa steel mill is being built down the road from the proposed pellet plant at an estimated cost of $180 million.

"AnSteel's steel mill location, at the regional port of Bayuquan, also offers a number of operating cost benefits because of the close proximity to an existing power station, water supply and utilities, and access to competitively priced power and labour," Gindalbie said.

"The close proximity of the pellet plant site to AnSteel's new steel mill also offers the potential for close integration of the Karara project with AnSteel's rapidly growing Chinese steel operations."

The material for the pellet plant will be concentrated at the mine, before being slurried by a 225km pipeline to Geraldton for shipping.

In addition, Gindalbie said it had signed a memorandum of understanding with the Geraldton Port Authority to export Gindalbie's hematite products through a new shiploader at the port's Berth 5, which is scheduled for completion within 12 months, and its magnetite products through Berth 7, which is being developed.