RESOURCES
JUNIORS JUMP ON THE ORE WAGON More stability in the iron ore market has spurred a rush of new mine plans, from the very small to the very large
BY STEPHEN BELL WA Works Editor
T
he Pilbara majors may have put their respective cues in the rack in terms of big iron ore expansions, but that hasn’t stopped their smaller competitors from chalking up development plans. A rebound in iron ore prices since November has helped the cause of the juniors, including Atlas Iron, the former multi-billion dollar producer which narrowly staved off collapse during the downturn after striking life-saving deals with its contractors and lenders. The leaner and more profitable Atlas recently approved development of its $50M Corunna Downs replacement project, one of several small iron ore mines now in the WA pipeline. After settling at about US$50 per tonne for much of last year, iron ore prices increased sharply to about US$90/t in 1Q 2017, contrary to most analysts’ forecasts. Global supply remains plentiful, but analysts say clean-energy 38 WA WORKS AUTUMN 2017
policies are forcing China’s steel industry to modernise, which creates more demand for highquality imported iron ore. Despite expectations that the price of the steel-making ingredient will weaken in the second half of this year, the improved outlook has lured a diverse range of proposals, ranging from a rebuild of a flooded Kimberley mine to an infrastructure-heavy Pilbara project backed by one of New Zealand’s biggest companies. Privately-owned Todd Corporation is the majority shareholder of BBI Group, which is working to lure customers and investors to its $5.6 billion Balla Balla iron ore project in the central Pilbara after it signed a State Agreement in January with the WA Government. The 50Mtpa venture, the first major Pilbara infrastructure project to emerge since iron ore prices crashed in 2015, would link stranded iron ore deposits with a new export facility at Balla Balla, near Whim Creek, via a 162km purpose-built railway. Should it proceed, BBI would generate about 3300 construction
jobs and more than 900 in production, said BBI Chairman Jon Young in describing the State Agreement as a “crucial milestone”. “The BBI project is positioned to be the next tier-one, lowcost, large-scale iron ore export infrastructure facility in the best address for producing iron ore in the world,” Young said. Flinders Mines, 53 per cent owned by Todd Corp, is a potential foundation customer courtesy of its 1 billion tonne Pilbara Iron Ore Project. BBI said it would be working closely with Flinders to seek a “mutually beneficial solution” to provide access to the proposed infrastructure. BBI was also engaged with a “number of parties” who were interested in the supply of iron ore sourced from the central Pilbara and/or an investment in the project, it added. Established in 1884, Todd Corp. has interests in oil and gas, electricity generation, energy retailing, property development, minerals, healthcare and technology. There are three other mooted
iron ore mine developments in WA’s North West, but none as grandiose as BBI’s. Nevertheless, Mount Gibson Iron’s plan to restart its Koolan Island mine in the Kimberley would certainly turn heads. As WA Works goes to press, a $90 million restart of the mine looked increasingly likely after Mount Gibson CEO Jim Beyer said a decision would be made soon. “It is looking positive for us with our work on Koolan,” he told investors during a teleconference. First ore production was due about 18-20 months after a go-ahead for rebuilding Koolan’s Main Pit seawall which failed in late 2014, flooding the pit. The aftermath of that event made global headlines when a news agency reported that a large crocodile, dubbed Eric by company employees, took up residence in the newly-created saltwater lake. Once the pit is drained, crocodiles relocated and the seawall reinstated, Mount Gibson is targeting a project delivering at least 15 million tonnes of iron ore over three-to-four years of production.