Article by Paul Hunt courtesy of Australian Mining Monthly.
MINERAL Resources has locked in port and rail agreement with Hancock Prospecting, ensuring it can export iron ore from its assets in Western Australia’s Pilbara that were once considered stranded.
MinRes and Hancock announced the agreement on November 29, which will involve the development of an iron ore export hub at the Port Hedland Standley Point Berth 3, in South West Creek.
Hancock subsidiary Roy Hill will develop and then operate the port, including rail haulage and loading of iron ore onto ships.
It follows MinRes’ $400 million acquisition of the Red Hill project in August.
Under that deal, MinRes took a 40% stake in Red Hill alongside fellow joint venture partners Aquila Resources and AMCI.
The Red Hill project will be incorporated into MinRes’ larger Ashburton Hub and Bungaroo South project.
Ashburton hub is expected to produce 30Mtpa on its own. Incorporating the other tenements will increase this rocket further.
Red Hill hosts about 820Mt of inferred iron ore resources grading 56.44% iron.
The deal with Hancock effectively ensures ore mined from both projects can get to market at a reasonable cost.
Mineral Resources managing director Chris Ellison said the partnership and infrastructure sharing was the first of its kind in the Australian resources industry and would enable significant value to be unlocked for MinRes in a sustainable manner.
“Our long-stated strategy is to transform from short-life, high-cost mines to lower-cost, longer-life operations underpinned by innovative infrastructure solutions.”
MinRes will still need to link its projects to Hancock’s rail.
In a statement, MinRes noted it would need to receive approvals from the Pilbara Ports Authority for construction of the new berth.
Other environmental approvals still need to be granted to get its mines into production, and for Hancock to build additional rail and other infrastructure.
“We look forward to working with Hancock, Roy Hill, PPA and the state government to progress this project which would help unlock stranded assets in the Pilbara and would create thousands of jobs for West Australians for years to come,” Ellison added.
A final investment decision by both parties has not been made yet.
No financial details were made public.