Rebecca Puddy | The Australian | March 08, 2014 12:00AM
Iron Road managing director Andrew Stocks, on the site of the proposed mine this week, says the company still needs investors to get the project up and running. Picture: Kelly Barnes Source: News Corp Australia
UNDER sandy soil farmed for more than a century on South Australia’s remote central west coast is the country’s largest iron magnetite resource.
By 2018 it should be an open-cut mine, pumping dollars into a state economy in need of a boost.
The 6km-long Central Eyre Iron mine in the wheat belt of Eyre Peninsula is forecast to earn $US2.8 billion ($3.1bn) in revenue a year, equalling the earnings from South Australia’s wheat, beer and wine exports combined.
At its peak, the mine will run 24 hours a day and employ up to 700 people, transporting ore by rail 150km to a custom-built deep sea port near Cape Hardy on the Spencer Gulf.
During its planned 25-year life, the mine is forecast to provide a 21 per cent rate of return, with operating costs totalling $US44.33bn.
The mine, which has been designated a major development by South Australia’s Labor government, will include a 600m deep open-cut mining pit, a processing plant on site, rail and port.
Iron Road managing director Andrew Stocks said the company still needed to attract investors to get the project across the line, blaming the mining tax and ever changing industrial relations landscape for scaring off international partners. “When I travel to China they say, ‘Is Australia open to foreign investment?’,” Mr Stocks said.
“Knee-jerk political reactions do not help anybody, well thought-out policy does.”
The company was looking for joint venture partners for every element of the project, he said.
“We need finance over the whole project to build it but we don’t have the balance sheet to be able to get that finance, so we need to partner on individual components of the project,” Mr Stocks said.
Iron Road plans to process the 16 per cent concentrated magnetite through a magnetic process using only water, to export 21.5 million tonnes a year of 67 per cent iron concentrate at a forecast market price of $130 a tonne.
The mining company hopes to open its port to other mining and grains exports, linking to the Australian rail network with the potential to export resources from BHP’s Olympic Dam, Arrium’s Middleback Ranges and Southern Iron mines and IMX’s Cairn Hill Mine.
Stakeholder engagement adviser and local farmer Tim Scholz said most of the local community had been brought onside by the promise of reinvigorated towns that could restore the supply of essential services through increased population.
Iron Road plans to build a mining village in nearby Wudinna housing 250 to 300 employees to try to lure fly-in, fly-out workers to stay in the area.
Despite this, there was some concern about the impact of the mine from the six landholders who would have to forfeit land and the 42 landholders who live along the railway route.
“If you look at the statistics ... any new economic activity that comes along, as long as it is different to the agricultural cycle, has got to be good value,” Mr Scholz said.
“It gives us a chance to lift our population base and we are at the stage where we are starting to lose essential services like medical services and education.”
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