Story in today's Fairfax press won't hurt I'm sure. Rutila and...

Story in today's Fairfax press won't hurt I'm sure.


Rutila and Flinders Mines to build iron ore port and rail line in Pilbara
Date February 28, 2014

A new port and rail project would be built at the heart of Australia's iron ore industry under an ambitious plan for the Pilbara being hatched by former Lynas boss Nick Curtis.

Shares in Mr Curtis' low-profile iron ore venture Rutila Resources soared 30 per cent on Thursday after it announced the port and rail joint venture with ASX-listed Flinders Mines and private New Zealand company Todd Minerals.

The $3.3 billion plan would see a port built halfway between Port Hedland and Rio Tinto's port at Cape Lambert, close to where Rutila hopes to develop a magnetite project. The port would be connected to Flinders' stranded iron ore project by a 200-kilometre railway, in a link that would end Flinders' long search for a transport infrastructure partner.

The small-scale port would use barges to ferry the ore to larger vessels more than 30 kilometres offshore, thereby reducing the need for dredging and other infrastructure that is typical at a deep-water port.

Such barging - or trans-shipping - has been used by the Sino Iron project in the Pilbara, and Mr Curtis said it could also be the solution for Rutila and Flinders. ''This is real technology, it's simple and the operating costs are not substantively higher than a deep-water port load-out facility,'' he said.

Rutila expects to require up to 10 million tonnes of port capacity, and has offered an initial 20 million tonnes of annual port capacity to Flinders, with potential for further expansions. Rutila already has some approvals for environmental works close to the port, but the larger joint venture would require numerous more approvals, particularly with regard to the rail line.

Flinders was in a trading halt on Thursday, conducting a capital raising that is expected to bring in between $10 million and $20 million, but the markets' warm reaction to Rutila shares confirms that the most valuable commodity in the Pilbara is not iron ore; it is access to a port and rail solution.

Funding the project will be the most difficult part, given Rutila and Flinders boast market capitalisations of about $24 million and $55 million respectively.

Mr Curtis said the economics were compelling and very competitive in the context of the iron ore industry.

''The signing of this alliance agreement is an innovative solution among junior mining companies to unlock efficient export solutions,'' he said.

Mr Curtis stood down as chief executive of rare-earths miner Lynas last year.

Rutila and Flinders will spend the next 18 months conducting a bankable feasibility study. A final investment decision is expected by December 2015.

Flinders chairman Robert Kennedy said he was pleased to break the deadlock.

''It's been a very long, hard road but we have come to a very satisfactory arrangement for our shareholders,'' he said.