Magnetite Mines Ltd (ASX:MGT) has taken another important step in developing a ‘Green Iron’ industry in South Australia by signing a Memorandum of Understanding (MoU) with Australian renewable energy company ZEN Energy.
This agreement provides the framework under which the parties will work together to negotiate one or more binding transactions relating to the development and energy provision for Magnetite’s Razorback Iron Ore Project, as well as collaboration on the development of possible future Green Iron production projects.
Shared interests
Both companies have shared interests in the development of a Green Iron industry in the state, for which the two enabling inputs are premium-grade magnetite concentrates and abundant renewable energy with ZEN having renewable energy projects near the Razorback Project.
ZEN’s name represents its renewable energy commitment as it stands for Zero Emissions Now.
“A common vision”
Magnetite Mines chief executive officer Tim Dobson said: “We are very pleased to formalise a working relationship with ZEN Energy via this MOU. ZEN’s South Australian renewable energy projects are located near our Razorback Project.
“Our companies share a common vision for the development of a Green Iron industry in South Australia, underpinned by Razorback’s magnetite concentrates and ZEN’s renewable energy.
“By positioning itself to export Green Iron to the world, South Australia can embody its renewable energy advantage into an increasingly valuable and desired low-carbon export product and in doing so, secure a major new economic opportunity for generations to come.”
About the MoU
The MoU forms the basis on which Magnetite Mines and ZEN Energy will work together to negotiate one or more binding transactions, including an energy offtake agreement between the company and one or more of ZEN’s projects, and/or related infrastructure sharing or leasing agreements between assets owned by ZEN Energy and Magnetite Mines.
Both parties will also work together toward farm-in, offtake, co-venturing or partnering arrangements in connection with the Razorback Project along with participation in future Green Iron projects.
Razorback collaboration
In terms of developing the Razorback Project, the MoU provides the framework for collaboration with regard to:
The latter would potentially include:
- Pellet plant development for pellet export and/or Direct Reduced Iron (DRI) plant supply;
- DRI/Hot Briquetted Iron (HBI) plant development;
- Hydrogen plant development (for use in DRI/HBI production); and
- Rail, port and logistics development.
If the MoU does not lead to a binding transaction between the two parties, it will expire in July 2025.
“Enabling new value chains”
ZEN Energy CEO Anthony Garnaut said: “ZEN's collaboration with Magnetite Mines represents a new load bigger than Olympic Dam to connect to the grid before the end of the decade.
"ZEN seeks to play a leadership role in bringing together the needed firmed renewable generations to enable this significant development as well as the corresponding value chain in enabling Green Iron production in South Australia, particularly around Port Pirie.
"The collaboration between ZEN and Magnetite Mines in enabling new value chains to realise Green Iron production in South Australia demonstrates that the Superpower vision for Australia can become a reality, and at a market competitive cost.”