The Karara Iron Ore Project involves an integrated development of the world-class magnetite deposit at Karara to produce both high grade magnetite concentrate on site and blast furnace quality pellets in north-eastern China.Karara is a world-class orebody in terms of its scale, quality, consistency and extremely low waste: ore stripping ratio, which will result in relatively low mining costs.
Key Project Metrics
- Resource (exclusive of reserves) – 1.853 billion tonnes @ 35.4% Fe (Indicated & Inferred)
- Ore Reserves – 522 million tonnes @ 36.3% Fe (Probable)
- Waste: ore stripping ratio – 0.34: 1
- 8Mtpa initial production of high grade magnetite concentrate
- Average 68.2% Fe magnetite concentrate grade with low impurities
- 4Mtpa pellet production at a new plant in China, also in joint venture with AnSteel
- Average 66% Fe pellet grade
- 60-year mine life at initial 8Mtpa production rate
- Capacity to expand production to +30Mtpa for more than 30 years
Project Scope
Gindalbie announced the results of a positive Bankable Feasibility Study (“BFS”) on the magnetite phase of Karara in September 2007, confirming the economic and technical viability of the project. The BFS contemplates:
- a conventional 20Mtpa open pit mining operation;
- production of 8Mtpa of magnetite concentrate on site at Karara;
- transportation of magnetite concentrate to the Port of Geraldton using rail as the preferred product transport mode, to accommodate future expansion;
- production of 4Mtpa of blast furnace quality pellets at new JV Pellet Plant at Yingkou Port, north-eastern China;
- off-take for magnetite concentrate and pellets at Ansteel’s new 6.5Mtpa Bayuquan steel mill at Yingkou Port;
- First production of magnetite concentrate and blast furnace grade pellets is scheduled to commence mid-2011.
Hematite Production
The Karara Iron Ore Project incorporates numerous Direct Shipping Ore (DSO) hematite deposits. Gindalbie and Ansteel are working towards commencing production of DSO quality hematite at an initial rate of 2mtpa in the first half of 2011.
Karara Expansion
The known resources at Karara are sufficient to support production of +30Mtpa for more than 30 years. Gindalbie and AnSteel remain committed to the future expansion of Karara well beyond its start-up capacity and as such, much of the on-site and associated infrastructure is being designed and built to accommodate production levels well in excess of 8Mtpa.
Infrastructure
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Rail
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Rail solutions have been identified to transport iron products from Karara to Geraldton Port for shipping. Part of the solution involves building a new 85km spur line from Karara to Tilley Siding, near Morawa. An existing rail line runs from Morawa to Geraldton.
Work on the spur line is likely to start early in 2010.
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Port
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The Geraldton Port remains the initial solution to export iron ore products from Karara to China. Facilities upgrades at the Port will include new dedicated Karara storage facilities on land behind Berth 5 & 6, which will provide the capacity to export up to 14Mtpa. The proposed Oakajee Port, north of Geraldton, remains the planned export port for the future expansion of Karara.
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Power
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Energy for the Karara site will be transmitted through the WA Government’s South West Interconnected System (SWIS) network under a 15 year energy supply agreement with State energy utility, Verve Energy, which was signed in the December Quarter, 2007.
As part of the strategy to build additional infrastructure in the initial phase of the Project, the planned power line from Karara to Eneabba will be upgraded to 330kV, from 132kV. There is an existing network of 132kV power lines from Perth to Geraldton which will be able to provide the necessary power for an approximate 10Mtpa start-up.
The WA State Government has committed to upgrade and build a 330kV power line from Pinjar, north of Perth, to Eneabba.
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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.