Australia’s Mineral Resources (ASX: MIN) has pulled the trigger on a $2.1 billion (A$3bn) iron ore project in the West Pilbara region of Western Australia, which is backed by China’s state owned biggest steelmaker Baowu, the country’s largest.
The decision to go ahead with the Onslow iron ore project, through Red Hill Iron Joint Venture (RHIOJV), will open stranded deposits that would otherwise remain undeveloped. It would also bring a new port to West Pilbara.
Onslow Iron will be one of the largest iron ore developments undertaken in Western Australia, with Stage 1 consisting of the JV tenements which host mineral resources of 820 million tonnes, and 537mt in ore reserves.
“It’s a flagship iron ore project for MinRes as we transition to low cost, long life operations with compelling project economics through commodity price cycles,” the miner said in the statement.
MinRes will continue to act as manager of the JV, and earn an additional 17% interest in the project by funding A$1.3 billion ($900 million) of the project’s capital expenditure via a loan.
The company will also fund, build, own and operate all the infrastructure outside the mine, including a private haul road, port infrastructure at the Port of Ashburton and two resorts to accommodate the project’s workforce.
“The Onslow Resort will set a new standard in accommodation for our fly-in, fly-out workforce. In an industry first, our resort-style accommodation will contribute to the physical and mental wellbeing of our people and will encourage more women, and couples, to live and work on site,” the company said.
MinRes noted the project will provide long-term benefits to the local Traditional Owners, the Thalanyji people.
“MinRes has agreed terms for a 30+ year lease of the Thalanyji freehold land that will host the Onslow Resort,” it said.
Early works are underway as part of the development phase, with all equipment expected on site by June 2023 and first ore on ship targeted as early as December next year.
Phase one of the Onslow project is targeting an annual capacity of 35 million tonnes per annum and is estimated to produce at a cost of $32.23 a tonne, excluding royalties. Iron ore prices are currently hovering around $108 a tonne.