Hawsons Iron Ltd (ASX:HIO) has signed a legally binding agreement with Flinders Ports Pty Ltd to co-operate on the potential development and operation of a greenfield port at Myponie Point Port on South Australia’s eastern Spencer Gulf.
The development would focus on the design, construction and operation of a greenfield port.
The agreement formalises the terms of an earlier non-binding memorandum of understanding (MoU), which has been expanded to include evaluation of lower tonnage options using existing rail and port infrastructure and possibly scaling production and export options over time.
The partners are now collaborating to determine the optimal port option.
Finding the right way forward
While Hawsons has slowed its initial pace, the slowdown is seen as an important step in finding an optimal port solution.
Hawsons managing director Bryan Granzien said the terms of the agreement reflected the board’s decision to slow the pace of work on the 20 million-tonne-per-annum (Mtpa) bankable feasibility study (BFS).
“Importantly, this agreement will enable us to collaboratively assess and agree on the optimum achievable port to support a revised BFS if required, including consideration of potential short and long-term solutions for our preferred site at Myponie Point,” he said.
“Flinders Ports fully understands our decision to consider scaling up the project’s production output and using existing rail and port infrastructure initially to reduce capital costs, and they could not be any more supportive.”
Granzien said options for Myponie Point included using the existing rail network and the construction of initial port infrastructure to support a barging operation during the first stage of the project’s development.
“This approach at Myponie Point could deliver the best of both worlds through a lower output startup operation at a lower capital cost and a clear pathway forward to expand production to 20 Mtpa using the direct-to-port underground slurry pipeline,” he said.
Terms of the agreement
Once final transaction documents are agreed upon, Flinders Ports would construct, own and operate the proposed Myponie Point Port – reducing the Hawsons Iron Project’s capital requirements, while enabling Hawsons to participate in future growth as the port’s ‘cornerstone’ customer.
Hawsons and Flinders Ports are also both committed to meeting ESG standards as part of the agreement.
“This milestone agreement with an operator of Flinders Ports' calibre is an important step to our goal of meeting demand for high-grade products so essential for decarbonising steel making,” said Granzien.
Flinders Port Holdings CEO Stewart Lammin said: “This agreement with Hawsons reflects our ongoing commitment to facilitating large-scale export projects from South Australia by leveraging existing infrastructure and exploring the development of new ports where necessary.
“The Hawsons project is an exciting prospect and aligns with our sustainability plan and aim to develop sustainable supply chains that meet the growing expectations of the market.”