MinRes to expand Western Australian iron ore exports

Spanish Market: Metals
10/02/21

Australian mining firm Mineral Resources (MinRes) plans to start building a 25mn-30mn t/yr iron ore mine in the Pilbara region of Western Australia (WA) in mid-2021, following firmer results from its iron ore division during July-December compared with the same period in 2019.

MinRes reported earnings before interest, tax, depreciation and amortisation of A$582mn ($450mn) for July-December, up from A$186mn a year earlier, on higher volumes and prices. The firm has now pushed ahead with a series of development programmes designed to increase its iron ore output, with the ultimate aim of becoming the fourth-largest WA iron ore supplier behind Rio Tinto, BHP and Fortescue and ahead of the 55mn t/yr Roy Hill joint venture.

In the short term it expects to deliver ore from its Wonmumma deposit this month to supplement output from its Iron Valley mine, which it has reclassified as part of the Utah Point Hub. The firm has further plans to start construction on the Lamb Creek and Wedge deposits at the Utah Point Hub during January-June 2023 and January-June 2024 respectively.

It then plans to start building the Kumina and Bungaroo South mines, with the aim of developing the 25mn-30mn t/yr Ashburton hub. These mines will initially feed ore up to MinRes' port facilities at Port Hedland, although the firm is also looking at options to ship through the port of Ashburton.

MinRes is waiting for approval to build two berths at Port Hedland at South West Creek, with an associated medium gauge railway connecting the 20mn t/yr Marillana mine, and possibly others in the MinRes portfolio, to the port. MinRes had planned to start developing Marillana by the end of 2020 but it is now waiting for approval to build the No.3 and No.4 berths at South West Creek.

The development of these berths will add to congestion at Port Hedland, which shipped a record 540.64mn t of iron ore in 2020. The WA state government expanded the maximum capacity of Port Hedland by 7pc to 617mn t/yr in October 2019 but concerns about dust in the adjacent town has restricted throughput. All the iron ore mining firms that use the port — BHP, Fortescue, Roy Hill, Atlas Iron and MinRes — have plans to expand production over the next few years, potentially making the port a future bottleneck for shipments.

MinRes ships ore with around 58-60pc Fe. Argus yesterday assessed the 58pc Fe grade at $150/dry metric tonne (dmt) cfr Qingdao, down from a high of $160.75/t on 21 December but up from $97.35/dmt on 29 July. Argus also assessed the ICX 62pc Fe at $162.50/dmt cfr Qingdao yesterday, down from $175.40/dmt on 21 December but up from $110/dmt on 29 July.

By Jo Clarke

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