Development and Infrastructure
Gindalbie and Ansteel have initiated development of the Karara Iron Ore Project, with a range of activities underway to ensure that construction can commence as soon as final environmental approvals are received during 2008 and 2009. The current development schedule is as follows:
• Engineering & Design
o Hematite Phase February 2008
o Magnetite Phase July 2008
• Finance Mid-Late 2008
• Public Environmental Review Mid-Late 2008
• Stage 1 Hematite Production 2009
• Stage 2 Magnetite Production 2010
• Regional Exploration Ongoing
Development
The completion of the Karara Bankable Feasibility Study in September 2007 triggered a range of engineering, procurement, planning and logistical programs, all of which are progressing well. Current project infrastructure solutions are summarised below:
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Current Status
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Rail
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Feasibility Study shows that rail is an attractive transport solution for Karara using upgrades to the existing network, plus a new spur line linking the site to Morawa. A Heads of Agreement was signed with rail provider Westnet in December 2007.
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Port
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Leases secured for Berths 5 & 6 at Geraldton Port, providing Gindalbie with available capacity of ~14Mtpa.
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Power
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A 15-year Power Supply contract was signed with Western Australian utility Verve Energy in November 2007, providing price certainty for consumption of up to 1 million MWh of base load power over an initial 15-year period.
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Gindalbie and Ansteel are also working towards finalising an off-take agreement for Karara under which Ansteel has agreed to take 100% of production to Ansteel’s new 6.5Mtpa Bayuquan steel mill in China.
The mill’s location adjacent to the Bayuquan Port at Yingkou Region has been purposely chosen to receive imported ore from Karara. Ansteel is already exploring opportunities to expand its steel producing capabilities at Bayuquan above 6.5Mtpa in expectation of additional feed from Karara.
The off-take agreement will include an agreed pricing structure and formula for the magnetite concentrate and pellets to be produced.