The Karara Iron Ore Project involves an integrated development of the 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
- magnetite JORC resource – 2,409Mt @ 35.9%Fe (Inclusive of 955.5Mt @ 36.4%Fe JORC Reserve)
- Estimated contained magnetite concentrate 1,027Mt @ 68.2%
- Waste: ore stripping ratio – 0.38: 1
- 8Mtpa initial production of high grade magnetite concentrate , and 2Mtpa hematite product
- 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;
- off-take for magnetite concentrate and pellets at Ansteel’s new 6.5Mtpa Bayuquan steel mill at Yingkou Port
Hematite Production
The Karara Iron Ore Project incorporates numerous Direct Shipping Ore (DSO) hematite deposits. The first shippment of Karara DSO was made at the end of March 2011, and the production is expected to ramp up to 2Mtpa in 2012.
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. Works on a new 85km spur line from Karara to Tilley Siding, near Morawis has commenced in 2011. The existing rail line runs from Morawa to Geraldton will be upgraded to support Karara's production.
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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, train unloader and a new berth/shiploader. The facilities will provide the capacity to export up to 16Mtpa. 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. The project is building the 330kV power transmission line from Karara to Eneabba to support +36Mtpa production.
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Gindalbie and Ansteel completed an off-take agreement for Karara under which Ansteel has agreed to take100% 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.