SYDNEY/TOKYO, Dec 10 (Reuters) - Australia's Roy Hill mine shipped its first iron ore cargo on Thursday, marking the start up of the last of the mining-boom era mega projects in the country.
The first shipment from the $10 billion project, jointly owned by Hancock Prospecting, Japan's Marubeni 8002.T , South Korean steelmaker Posco 005490.KS and Taiwan's China Steel Corp 2002.TW , came after a series of delays caused by safety and commissioning issues.
Roy Hill, with capacity to produce and ship 55 million tonnes of high grade iron ore annually, has secured long-term purchase contracts from steel mills in Asia including those in Japan for over 90 percent of the production, Marubeni said on Thursday.
The development has been led by Gina Rinehart, one of the world's wealthiest women, whose fortune comes from mining the rust-red northwestern Australian outback.
A Hancock Prospecting executive said the impact of the Roy Hill mine on an already oversupplied global iron ore market had been overstated, amid this week's plunge in prices for the raw material to record lows.
The first cargo of iron ore from the newly-constructed mine, majority-owned by Hancock was loaded this week for shipment to a Posco steel mill in South Korea.
"The initial shipments, such as this one today from Roy Hill, will only represent a small portion of its capacity of 55 million tonnes," executive director Ted Watroba said, adding that more than half the output will be taken by the minority investment partners, who are outside of China.
Iron ore futures in China dropped to their weakest on record on Thursday amid expectations falling steel consumption in the world's biggest consumer could shut more producers, cutting demand for the raw material.