Mineral Resources Ltd (ASX:MIN) has delivered the first ore shipment from its Onslow Iron Project to China Baowu Steel Group, the world’s largest steelmaker.
The delivery was ahead of schedule and marks the company’s intent to become an iron ore force as it branches out from lithium into interconnected businesses.
Currently, two MinRes transhippers are loading approximately 113,000 wet metric tonnes (wmt) of iron ore onto a bulk carrier anchored 40 kilometres off the Port of Ashburton.
MinRes moves quickly in iron ore
First ore was achieved just 11 months after breaking ground 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, 150 kilometres east of Onslow in the West Pilbara region of Western Australia, is owned by a joint venture comprised of MinRes and partners Baowu, AMCI and POSCO.
MinRes designed, built and manages the innovative mine-to-ship mining and transport infrastructure that unlocks stranded iron ore deposits in the West Pilbara.
The project aims to reach a nameplate capacity of 35 million tonnes annually by June 2025, with practical completion of project infrastructure, including the dedicated haul road, scheduled for the second half of 2024. At peak ramp-up, up to 1,600 operational roles are forecasted.
“This historic moment for MinRes cements our position as Australia’s leading commodity infrastructure business,” MinRes managing director Chris Ellison said.
“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.
“This project was 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 Onslow Iron Project, set to generate a return on invested capital greater than 20% based on a long-term iron ore price of US$75 per dry metric tonne, represents a significant milestone in MinRes' transition to low-cost, long-life iron ore operations.
Project metrics
- The first shipment comprises approximately 113,000 wmt of 58.5% 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 349 million tonnes at 56.4% Fe and 207 million at 58.1% Fe in ore reserves (as at June 30, 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 A$45/wmt, including MinRes’ life-of-mine mining services contract margins and a road infrastructure charge of A$8.04 per tonne.
- When this maiden shipment is delivered MinRes' effective ownership in the RHIOJV will increase to 60.3%.
- A life-of-mine product offtake agreement is in place with Baosteel Resources to purchase between 50% and 75% of the MinRes volume entitlement. For CY24, Baosteel Resources has elected to take 75% of the MinRes volume.