Plan change slashes Iron Road project costs

Iron Road drops rail to reduce project costs

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Iron Road managing director Andrew Stocks said it was necessary to reduce costs with the Central Eyre Iron Project to try and attract investment from different areas.

Iron Road managing director Andrew Stocks said it was necessary to reduce costs with the Central Eyre Iron Project to try and attract investment from different areas.

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IRON Road has reduced the capital requirements of its Central Eyre Iron Project by more than half, by moving from the use of heavy haulage rail to high capacity, dual-powered road trains.

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IRON Road has reduced the capital requirements of its Central Eyre Iron Project by more than half, by moving from the use of heavy haulage rail to high capacity, dual-powered road trains.

The total project capital requirement has gone from US$4 billion to US$1.74b.

There is also a much lower production target of 12 million tonnes a year at a grade of 66.7 per cent iron, half of the original projection of 24mt.

Changes to the project would make it the second largest magnetite mine in Australia, whereas the original plan would have made it the largest.

Iron Road managing director Andrew Stocks said it was necessary to reduce costs to try and attract investment from different areas, due to difficulties sourcing funds from Chinese markets, as was originally planned.

"We're looking at how we could make the project more palatable for western partners," he said.

"We've successfully reduced the capital costs by 56pc, and that's going to assist with project funding."

Mr Stocks said the company was still working through how to include grain exports at the Cape Hardy site.

"We're very keen to have third parties use the port for exports, be it grain or iron ore, but we haven't signed a grain partner as yet," he said.

"But grain exports through Cape Hardy are very much on our radar. We're having discussions on how that might occur, it hasn't been forgotten."

Mr Stocks said a bonus of going to trucks rather than rail would be increased employment opportunities in the region's transport sector.

"Hopefully those extra jobs will lead people who might have left the Eyre Peninsula to come back," he said.

Mr Stocks said, with a lot of approvals in place for the former plan, the company was working through which were still relevant, and what needed to be resubmitted.

The company had previously hoped to have exports going out from Cape Hardy in 2020, but Mr Stocks said once the project had all the approvals in place, it would still be a further 2.5 years before the site was operational.

Regional Development Australia Whyalla and Eyre Peninsula chief executive officer Dion Dorward said despite the project being scaled back, it still offered a massive opportunity to the region.

"It's still a massive project in terms of the capital cost and the volume of iron ore being exported," he said.

"By creating extra jobs in region, it will have flow-on effects, to shops, schools and sporting clubs."

Mr Dorward the project had the RDA's full support.

"There's an absolute need at a state level, not just for this region, for a deep water, multi-commodity port," he said.

"Iron Road's project is the only one that has the deep water and approvals in place.

"The RDA has always been confident the project will get there because there are great resources in the region that need a pathway to market.

"I think with the new plan, there's much greater optimism that the day we see Capesize ships tied up to the new port is so much closer now."

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