Current mining of iron ore in the southern YIP will soon be augmented with the commencement of an iron ore mining industry in the northern portion of the YIP.
Set to begin within the next few years, additional infrastructure will be required.
With a half a dozen companies announcing plans to start Direct Shipping Ore (DSO) and/or magnetite operations within the next four years, up to $5 billion worth of investment could flow into the YIP during the start-up phase.
This new iron industry could generate 2000 jobs per magnetite operation and 400 jobs per DSO operation in the construction phase alone. (These figures are drawn from publicly available data from similar projects such as the Sino Iron project which is being developed at Cape Preston, 100 kilometres south west of Karratha in the Pilbara (3500) and Asia Iron’s Extension Hill project 85 km east of Perenjori (2000 workers at peak). Karara Mining’s Mid West project has 2000 jobs in the construction, 500 permanent and 300 in indirect jobs.
With the addition of supporting services workers, thousands of permanent jobs could soon be created in the YIP, Goldfields and Esperance regions of WA.
Not only the immediate region, but all of WA will prosper from significant infrastructure upgrades and the establishment of a new long term iron ore export industry with 40 year plus mine lives.
Over the years, the Goldfields region has hosted many smaller nickel and gold mines, often with short life spans, that were buffeted by the ups and downs of unpredictable economic cycles.
Counter to this, new magnetite mining operations promise an era characterised by scalability, reliability and longevity which can deliver to the Goldfields a period of sustained long term growth and economic well being not previously seen.
The YIP extends from Wiluna to Koolyanobbing near Southern Cross and 150 km west of the Leonora-Kalgoorlie-Esperance Port infrastructure corridor.
And the YIP has significant advantages over other iron provinces.
Big miners have a stranglehold over infrastructure in the Pilbara and the Mid West is still waiting for the Port of Oakajee to get the go ahead.
Also, the YIP is a Brownfield game, with only relatively inexpensive, incremental infrastructure upgrades required rather than costly new Greenfields builds as with Oakajee Port.
Prospective infrastructure providers put the cost at about one billion dollars to upgrade Esperance Port, upgrade existing rail and build a new 160 km spur line from Menzies to Mt Forrest.
This will kickstart a new iron industry delivering an initial 20 Mtpa.
On today’s numbers, the YIP boasts an exploration target of over 15 Billion tonnes of Potentially Beneficiable Magnetite and over one Billion tonnes of DSO. JORC standard resources are already at about 5 Billion tonnes of magnetite material and 800 Million tonnes of DSO and vigorous ongoing exploration will see these figures grow considerably.
The YIP is already a small but growing iron producer with between 9 and 11.5 Mtpa of Direct Shipping Ore to be exported by Cliffs Natural Resources through the Port of Esperance (EPSL) by next year (8.8 Mtpa last year).
Polaris Metals (Mineral Resources) in May secured a 4.4 Mtpa allocation through the Port of Fremantle (Kwinana) and ore was first shipped in November.
This product moves westwards along the east-west rail track to Kwinana whilst Cliffs moves its ore to Esperance Port.
Other miners are poised for action. Cazaly Resources, Golden West Resources, Mindax Limited and Jupiter Mines are close to mining and Legacy Iron Ore is not far behind. Fe Limited and Radar Iron are progressing well through the exploration phase with an eye on mining.
The Province extends from
Wiluna to Koolyanobbing near Southern Cross and 150 km west of the
Leonora-Kalgoorlie-Esperance Port infrastructure corridor.
Prospective
miners keenly await the construction of the new port at Oakajee. This new capacity and upgrades at Esperance, Kwinana and Albany ports will help unlock the
Yilgarn Iron Province's export capability. In addition, significant rail upgrades are already underway to bridge the mine to port gap.
Fremantle (Kwinana berth 5) Port Upgrade - FPA linkPolaris Metals (Mineral Resources) has in May secured a 4.4 Mtpa allocation through Kwinana and ore began being shipped in November. Bulk Terminal 5 is capable of further upgrade which is currently being considered by the State Government.
Albany Port Upgrade - APA link
Grange Resources is working to export ore from its $2.6 billion Southdown Project through the Port of Albany. The proposed Albany Port upgrade is a major project that will increase the Port's annual tonnage throughput from around 4 Mtpa to 11 Mtpa through the export of
iron ore.
Albany Port is being condsidered as an export port over and above Grange's proposal.
Oakajee Port Construction - Dept of Transport WA
The construction of Oakajee will serve the Mid West and the northern part of the Yilgarn iron province. This new port is vital to the development of the YIP and is strongly supported by YIPA Inc.
Esperance Port Upgrade
YIPA members are planning to access the upgraded, multi-user port at Esperance with negotiations under way to ship ore when construction is completed. (2013 being the nearest forecast).
Ports Minister Troy Buswell pledged to go ahead with the port upgrade on January 19th 2012 (see statement)..
EPSL in November 2010 announced a proposal to upgrade the 11.5 Mtpa iron ore export licence capacity by 10 Mtpa within two years followed by another 10 Mtpa soon after bringing the total to about 32 Mtpa. In May 2011, Ports Minister Troy Buswell gave permission for the Port to develop a detailed plan, based on the above. Stage One and Stage Two may be constructed as the same time.
Upgrade Stage One (capacity 10 Mtpa)
- New twin RCD (cell rail car dumpers) and associated infrastructure
- Two negative pressure sheds (800,000 tonnes) with automated product reclaiming systems
- New rail and conveyer systems
- 10 MW gas turbine power station
- New 10,000 tph (tonne per hour) ship loader
Upgrade Stage Two (capacity 10 Mtpa)
- Extend berth 3 to allow for two Cape sized ships
- Increase combined ship loading to 20,000 tph
Menzies to region of Mt Forrest – New Rail approx 160km
This final piece of new track will connect prospective mines
to the existing rail hub at Menzies and onwards to existing iron ore export
ports. Prospective miners are examining
options for the construction of this last 160km stretch.
Menzies to Kalgoorlie – Rail Upgrade
This section of the line requires re-railing, re-sleepering
and additional passing loops to bring it up to the standard required for heavy
haulage iron ore transport. Discussions
are underway between prospective miners and infrastructure providers to
undertake this upgrade.
Eastern Goldfields Railway Upgrade ($95 million)
Project status: Planned
The Eastern Goldfields Railway (EGR) project involves the replacement of the existing 47
kilograms per metre rail with heavy duty 60 kilograms per metre rail on 185 kilometres of the EGR
between Koolyanobbing and Kalgoorlie.
Once completed the line will meet national operating
standards of 21 tonne axle loads at a maximum speed of 115 kilometres per hour and 25 tonne
axle loads, with a maximum speed of 80 kilometres per hour, agreed to by all Federal and State
Ministers for Transport and provide the platform to increase to 30 tonne axle load operations in
future.
The line currently shoulders 80 percent of all freight carried from the Eastern States into Western
Australia, including over 16 million tonnes of interstate and intrastate freight and 132,000
passengers on more than 1100 passenger’s rail services per annum.
Capacity will increase to 183 train paths per week from the current 142 paths to meet projected
demand. The Federal Government investment of $95 million will be a significant boost to the
economy, and provide opportunities for the continued growth of exports through the Port of
Esperance.
Work has commenced on site with approximate 315 workers in total and is on schedule to be
completed by late 2011.
Kalgoorlie to Esperance Line Upgrade ($130 million)
Project status: In progress
Partnering with Cliffs Natural Resources, WestNet Rail is upgrading rail infrastructure to support
the iron ore operation from Koolyanobbing through to Esperance Port.
This $130 million plus investment is conducted in four stages:
Stage 1 – Re-rail and re-sleeper 120 kilometres of track and build additional crossing loops –
completed December 2009.
Stage 2 – Upgrade an additional 55 kilometres of track – Completed July 2010.
Stage 3 – Extend existing crossing loops and redevelop the Esperance rail yard - work has
commenced and completion is scheduled for January 2012.
Stage 4 – Re-rail and re-sleeper the last 100 kilometres of track between Kalgoorlie and
Esperance – Underway, first stage 40 kilometres due for completion October 2011.
Esperance Port Approach Upgrade
Regional Development Minister Brendan Grylls has signed off on a $120 million upgrade to road and rail infrastructure on the approaches to Esperance Port. This will remedy road traffic bottlenecks within the town site and is expected to be completed by end 2013.
Esperance Port - Remote bulk materials handling facility with conveyor to existing port
Currently YIPA had identified the port entry and yards as a potential bottleneck for rail traffic into an upgraded port. A solution could be a remote bulk materials handling facility connected to the port via conveyor:
o Possible to reduce train movements to port
o Resident friendly, use of ultra quiet and dust dampened conveyor
o Government owned land available ~ 6km from port
o Open access green field development
o Ability to develop Open Access rail provisioning and maintenance facilities
o Attract additional Rail Operators to increase competition
Proposed Pellet Plant
YIPA and members are in discussion with Kobe Steel about establishing a JV to finance, build and operate a pellet plant which would use iron ore from the YIP.
A JV arrangement would see Kobe receive a guaranteed long term off take deal at a discounted price.
Various sites have been discussed including between Mt Forrest and Kalgoorlie (which has the gas pipeline 70 km to the east) and as far afield as Oman.
A 6Mtpa plant would cost $500m and take three years to construct. The $20 to $30 per ton processing cost is returned via a $40 to $50 premium on pricing.
YIPA has discussed the matter with WA Department of State Development and Goldfields Esperance Development Corporation.
