Australian mining firm Mineral Resources (MinRes) has expanded its ambition for its South West Creek iron ore mining hub in Western Australia (WA) from 20mn t/yr to 25mn t/yr by widening the scope of its Marillana joint venture with Australian firm Brockman Iron.
The firms plan to take 3½ years to develop the mining hub, a transport system to take the ore across the 320km to Port Hedland and two new berths at Port Hedland. They will begin work on the mine sites, transport corridor and port area immediately with the injection of A$105mn ($82mn) from MinRes, despite not having received state government approval to build the two berths at Port Hedland at South West Creek.
The new joint venture adds Brockman's Ophthalmia project, which has a mineral resource of 341mn t of 59.3pc Fe ore, to the Marillana project that has reserves of around 378mn t at a beneficiated Fe of 60.5-61.5pc. The initial target is to produce 25mn t of iron ore for export through Port Hedland, although the two proposed South West Creek terminals at the port would have a capacity of 50mn t/yr.
Mineral Resources bought into the Marillana iron ore project in July 2018 from Chinese-controlled mining firm Brockman and the project has been delayed at least twice over the past three years due to approvals.
The development of the two new terminals would add to congestion at Port Hedland, which services UK-Australian mining firm BHP's iron ore exports as well as those from Australian firms Fortescue Metals and Roy Hill. All the mining firms are examining expansion options to allow them to benefit from strong iron ore prices that are driven by high steel prices in China.
BHP used 42mn t and Fortescue 58mn t of Class D port capacity in 2020 because they had used their allocation of Classes A and B, according to MinRes. Class D is opportunistic port capacity that is available to port users once they have reached their allocation under Classes A and B. This would fall below capacity allocated to MinRes' South West Creek in priority at the port, and potentially increase shipping delays for BHP and Fortescue.
The firms that use Port Hedland are lobbying the WA state government to make a decision on the development of South West Creek as quickly as possible to allow market participants to best capitalise on strong demand for WA iron ore.
Argus assessed the 58pc Fe grade at $163.65/dry metric tonne (dmt) cfr Qingdao on 23 April, down from a high of $165.40/t on 20 April but up from $97.35/dmt on 29 July. Argus also assessed the ICX 62pc Fe at $185.95/dmt cfr Qingdao on 23 April, down from $188.70/t on 20 April but up from $110/dmt on 29 July.
