Ore output sinksNIGEL ADLAM | February 9th, 2011 The Frances...

Ore output sinks
NIGEL ADLAM | February 9th, 2011


The Frances Creek iron ore operation. Picture: SUPPLIED
A TERRITORY mine has only itself to blame for a dramatic drop in production, a former major shareholder said yesterday.

Joe Fondacaro said he was about to sign a deal to install a wet processing plant at the Territory Resources-owned Frances Creek iron ore operation when the miner pulled out.

The dry plant at the mine near Pine Creek was unable to handle much of the wet ore in the last quarter of 2010.

Mr Fondacaro, who helped build up the company in its early days, said he had lost millions of dollars when Territory Resources didn't sign the agreement.

"I worked hard to keep the company going and got nothing for it but a kick up the arse," he said. Production at Frances Creek fell by 30 per cent in the last three months of 2010 because of the intense wet season.

The mine turned out a lower-than-expected 323,106 shippable tonnes of iron ore, compared with the 463,500 tonnes in the previous quarter.

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"Hey Joe, enough of the sour grapes. Maybe if you lifted your game you would still be here."
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Mr Fondacaro said his company, Mineral Crushing Services, built the wet processing plant in Perth.

He said Territory Resources executives examined the plant and agreed to buy it.

"We were all ready to pack it up and freight it to Frances Creek, where it would have been reassembled," Mr Fondacaro.

"It would have been able to handle material made sopping wet by the heavy rain."

He said Territory Resources opted to use only a dry plant, which could not handle ore any wetter than "moist".

Territory Resources boss Andy Haslam said the slump in production had nothing to do with the crushing and screening plant.

"We've had an amazing wet season," he said. "We haven't been able to use one of our carting roads because it's waterlogged. It's bloody hard to mine when the open pits keep filling up with water.

He said Frances Creek had received 360mm of rain in December and 418mm last month.

Only five shipments ran from Darwin to China.

But good spot prices helped the company report a healthy profit for the last six months of the year - $9.4 million after tax.

The profit would have been better but for the strength of the Australian dollar.

Territory Resources has commissioned its new beneficiation plant at Frances Creek.

That will allow scalps and low-grade ore stockpiles to be upgraded to saleable grades.

Territory Resources will now assess whether this will extend the life of the mine.