Magnetite Mines Ltd (ASX:MGT) has “entered a transformational period” with its future “being defined not solely by our world-class, large-scale resources but more so by the accelerating market demand for premium iron ore products created by the iron and steel sector’s commitment to decarbonise”, chair Paul White told the company’s AGM today.
In addressing shareholders, White said decarbonisation “is gaining pace both globally and locally by nations and states positioning to secure the economic opportunity this presents”.
Magnetite Mines is the owner of 6 billion tonnes of iron ore and the developer of the Razorback Iron Ore Project in the prospective Braemar iron region of South Australia, 240 kilometres from Adelaide, and has the potential to produce high-value Direct Reduction (DR) grade concentrates.
Razorback progress
The company is advancing Razorback to become a multi-decade and scalable iron ore project with expansion optionality in a tier-1 jurisdiction that will produce a rare and superior iron ore product sought by steelmakers globally.
In relation to decarbonisation, White said: “We have been observing the subtleties of this shift for some time and have positioned Razorback to take advantage from the gathering momentum around us.
“The project’s massive scale, ability to produce premium DR-grade iron ore products essential for low-carbon steelmaking, proximity to rail and port infrastructure, and growing community and stakeholder support, together provide us with the confidence that the project will enable the company to flourish.
“Over the past 12 months, the company has made significant progress in delivering our strategy through advancing key strategic partnerships for Razorback’s development, completing the substantial work required to lodge a Mining Lease Proposal with the South Australian Government, and through the delivery of breakthrough technical work designed to materially derisk the project.”
Strategic partnerships
The chair said that efforts to secure preferred strategic partners integral to the funding and development of Razorback were now paying off.
“The company has been laser-focused on North Asian steelmakers actively seeking to secure long-term, high-grade magnetite supply in support of their transition to decarbonised steelmaking.
READ: Magnetite Mines signs green iron supply deal with JFE Shoji Australia
"Of particular significance was the signing of a non-binding Heads of Agreement with JFE Shoji Australia Pty Ltd.
"We believe this landmark agreement will be seen in hindsight as a significant milestone in the company’s history.
"JFE Shoji is a part of the wider JFE Group that incorporates JFE Steel, Japan’s second largest steelmaker, and this agreement sets the framework for definitive feasibility study funding, the completion of which is central to achieving a Final Investment Decision (FID) for Razorback.”
He said just as noteworthy was the public acknowledgement by JFE of the opportunity the project presented to them, "and its alignment with their strategy to decarbonise their Japanese steelmaking operations".
"For clarity, after a global search, Magnetite Mines’ Razorback Project is the only low-carbon iron ore supply chain project that JFE has agreed a transaction framework for."
Mining Lease Proposal
Another milestone reached during 2024 was completing all the work required to submit a Mining Lease Proposal to the SA Department for Energy and Mining, the cornerstone regulatory approval needed to achieve an FID.
In July, breakthrough laboratory results were released demonstrating the potential to produce DR-grade magnetite concentrates using saline water from Iron Peak ore.
"This innovative approach could significantly lower water costs, reducing the need for fresh water and the expenses tied to a large desalination plant," White said.
Policy momentum
Magnetite Mines welcomes the growing momentum in Australian government policy, both at State and Federal levels, to drive the development of a green iron industry.
READ: Magnetite Mines a founding member of consortium to spearhead South Australia's green iron revolution
“Premium-grade magnetite concentrates are crucial to this supply chain and this policy shift has given us a unique opportunity to seek and ultimately secure government support for Razorback’s infrastructure needs. This is something the company and the board remain focused on,” White said.
"Of particular note is the South Australian Government’s ‘Green Iron Opportunity (SO:FTCE11B) Expression of Interest’ process, and at a Federal level, the ‘Unlocking Australia’s Green Iron, Steel, Alumina and Aluminium Opportunity’ consultation process.
"Together, these new government agendas represent a significant policy shift aimed squarely at securing investment and commitment to a new Australian green iron industry.
"Magnetite Mines has engaged fulsomely in both of these policy development processes, and we look forward to updating shareholders on the implications of this work and the progress we are making."
Supporting new supply chain
In conclusion, White said, "the transition to low-carbon steelmaking has now reached our shores in Australia and Magnetite Mines has carefully positioned itself and the Razorback Iron Ore Project to take full advantage, as one of only a handful of projects globally that can support the new supply chain with premium-grade magnetite concentrates at scale.
"Our focus now is building on the foundations we have established over the past two years, ensuring we continue to progress Razorback to a development outcome, and most of all to ensure we deliver maximum value to shareholders."