Mineral Resources has announced that first ore on ship has been delivered ahead of schedule for the company’s Onslow Iron Project.
The company said that two MinRes transhippers are loading approximately 113,000 wet metric tonnes (wmt) of iron ore aboard a bulk carrier anchored 40km off the Port of Ashburton.
First ore was achieved eleven months after ground was broken at the Ken’s Bore mine site in June 2023 and less than two years after the Red Hill Iron Ore Joint Venture (RHIOJV) made a Final Investment Decision in August 2022.
The Ken’s Bore deposit, located on Robe River Kuruma Country, 150km east of Onslow in the West Pilbara region of Western Australia, is owned by the joint venture comprised of MinRes and partners Baowu, AMCI and POSCO.
MinRes designed, built and is managing the mine-to-ship mining and transport infrastructure which unlocks stranded iron ore deposits in the West Pilbara that the company says would otherwise remain undeveloped.
The project is expected to ramp up to nameplate capacity of 35 million tonnes annually by June 2025. Practical completion of project infrastructure, including the dedicated haul road, is expected in the second half of 2024.
MinRes’ Managing Director, Chris Ellison, said, “This historic moment for MinRes cements our position as Australia’s leading commodity infrastructure business.
“We have unlocked a whole new iron ore region for Australia while Onslow Iron is a game-changer for MinRes as we transition to low-cost, long-life operations.”
Mr Ellison said that the Onslow Iron Project was previously stranded for more than a decade.
“In 2021, MinRes breathed new life into it and in less than three years we have planned, designed and have now delivered first ore on ship ahead of time and on budget.
“It’s an extraordinary display of the unique capability of MinRes’ infrastructure and mining services, as well as the ingenuity of our unmatched in-house engineering and construction workforce.
“There is no other company that could have delivered an operation of this size in such little time. The achievement is a testament to the professionalism and can-do attitude of the more than 3,000 people who worked on Onslow Iron.
“I want to thank everyone who brought our vision to life, including joint venture partners Baowu, AMCI and POSCO, our Traditional Owner partners, the Thalanyji and Robe River Kuruma peoples and the wider Onslow community.”
The original project was studied for 15 years before MinRes acquired a stake in the joint venture in 2021 and introduced the company’s mining services and infrastructure solutions.
Early works commenced in mid-2022 as part of the project development phase ahead of the RHIOJV announcing an unconditional Final Investment Decision in August 2022.
MinRes advanced Onslow Iron with a forecast that the project would generate a return on invested capital greater than 20 per cent based upon a conservative long-term iron ore price of USD$75 per dry metric tonne Platts 62 per cent iron (Fe).
The first shipment comprises approximately 113,000wmt of 58.5 per cent Fe fines iron ore product (Onslow Fines) aboard a COSCO Shipping bulk carrier.
Stage 1 of the project consists of RHIOJV tenements that host Mineral Resources of 349Mt at 56.4 per cent Fe and 207Mt at 58.1 per cent Fe in Ore Reserves (as at 30 June 2023).
Stage 1 is targeted to achieve nameplate capacity of 35 million wet tonnes per annum by June 2025.
At nameplate capacity, Free on Board (FOB) cost is forecast at $45/wmt, including MinRes’ life-of-mine mining services contract margins and a road infrastructure charge of $8.04 per tonne.
When this maiden shipment is delivered, MinRes’ effective ownership in the RHIOJV will increase to 60.3 per cent.
A life-of-mine product off-take agreement is in place with Baosteel Resources to purchase between 50 per cent and 75 per cent of the MinRes volume entitlement. For CY24, Baosteel Resources has elected to take 75 per cent of the MinRes volume.
MinRes will provide life-of-mining services under crushing and mine-to-ship agreements. The contracts draw on MinRes’ suite of mining services and infrastructure assets, including NextGen crushers, autonomous road trains and a fleet of transhippers.
The haulage, port and transhipper operations are fully enclosed to ensure dust-free iron ore transport from mine-to-ship. MinRes owns and operates the crushing plant at the mine and all project infrastructure beyond the mine, including the dedicated 150km haul road, autonomous road trains, port infrastructure, transhipper wharf, transhippers and accommodation resort in Onslow.
MinRes said that the process to introduce a partner to own a 49 per cent interest in the dedicated haul road is well progressed and on track to be signed in H2 FY24.
Baosteel Resources Australia’s Managing Director, Yong Zhang, said, “I am thrilled to see our Onslow Iron project with MinRes achieve its first ore on ship, officially marking the start of commercial production. This milestone is a testament to MinRes’ leadership and the hard work of the project team.
“We look forward to continuing our strong partnership with MinRes and unlocking the full potential of this project. Congratulations to everyone involved for their dedication and effort.”
AMCI’s Group Managing Director, Patrick Murphy, said, “I have witnessed first-hand MinRes’ market-leading dynamic and innovative project execution model – first exports ahead of schedule are a testament to this.
“AMCI is thrilled to be partners with MinRes in opening up the iron ore potential of the West Pilbara and looks forward to continuing its long-term relationship. The future upside is immense given the untapped optionality that exists in the joint venture once the logistics infrastructure is in place.”
POSCO’s Western Australia Managing Director, Kihoon Pyo, said, “Congratulations on this significant milestone. I would like to extend our sincere appreciation to MinRes for their unwavering dedication and exceptional leadership in achieving the first ore shipment ahead of schedule.
“I look forward to strengthening our partnership and relationship with MinRes to ensure the continued success of the Onslow Iron project.”
Featured image: A MinRes transhipper loading Onslow Iron’s first ore to a COSCO Shipping bulk carrier. Image credit: MinRes.
