Iron Ore

Content maintained by Ron Sait

• Iron Ore
• Resources
• Accessible EDR
• JORC Reserves
• Exploration Expenditure
• Production
• World Ranking
• Industry Developments

Iron (Fe) makes up about 5% of the Earth's crust and is the fourth most abundant element and the second most abundant metal in the crust after aluminium. Most of the iron is found combined with oxygen as iron oxide minerals such as hematite (Fe₂O₃) and magnetite (Fe₃O₄). Almost all iron ore (98%) is used in iron and steel making with the remainder used in applications such as coal washeries and cement manufacturing. Iron is the most used metal and makes up 95% of all the metal tonnages produced worldwide. Iron is alloyed with a number of elements such as carbon, manganese and nickel to produce stronger and harder steels which are indispensable in construction, motor vehicles, ships, trains and train tracks.

Western Australia dominates the Australian iron ore industry, accounting for 97% of total production. The Pilbara region of Western Australia is particularly significant with 85% of Australia's total identified resources and 92% of its production. Locally significant iron ore mines also operate in the Northern Territory, South Australia, Tasmania and New South Wales.

In 2007 EDR increased by 8.9% to 20.3 Gt mainly due to the inclusion of Marillana, Mungada, Phils Creek and Red Hill-West Pilbara for the first time and large increases at the Cape Lambert deposit and the undeveloped Rio Tinto deposits. Western Australia has about 99% of Australia's EDR with about 89% occurring in the Pilbara region. Magnetite ore currently constitutes 24% or 4.8 Gt of Australia's EDR.

PDR increased by 74% to 0.3 Gt due a reclassification of resources and SDR decreased to 1.7 Gt following a reclassification of resources. Inferred resources increased by 36.4% to 24.4 Gt due to the inclusion of Abydos, Beebyn, Lake Giles, Wiluna West, Caliwingina North and Yalgoo for the first time and increases at Pardoo, Weld Range, undeveloped Rio Tinto deposits and Mining Area C. Western Australia has about 92% of Australia's total identified resources of iron ore with about 85% of the total identified occurring in the Pilbara Region.

Almost all EDR is accessible except for the remaining resource at Orebody 23 (18 Mt) in the Newman District and 30% of the Windarling resource which have both been quarantined for environmental reasons. The resource life of the accessible EDR of 20.2 Gt is more than 65 years.

About 40% of accessible EDR, or 8.1 Gt, is JORC reserves compliant. The resource life of accessible JORC reserves is more than 25 years. Rio Tinto and BHP Billiton manage 61% of the JORC reserves and magnetite ore constitutes 23% of the JORC reserves.

ABS data indicates that exploration expenditure for iron ore in 2007 totalled $354.1 million an increase from $224.7 million in 2006. About $333.3 million, or 94.1% was spent in Western Australia.

ABARE reported that Australia's iron ore production in 2007 was 299.1 Mt compared to 275.1 Mt in 2006 with 97% produced in Western Australia. Exports in 2007 totalled 267.2 Mt compared to 248.4.0 Mt in 2006 and had a value of $16 billion. ABARE has projected that Australia's iron ore production will increase from 287.7 Mt in 2006-07 to 522.8 Mt by 2012-13. Exports are projected to rise from 257.4 Mt to 488.7 Mt over the same period.

In 2007 Australia had about 13% of world EDR of iron ore and was ranked fourth after Ukraine (19%), Russia (16%) and China (14%). In terms of contained iron, Australia has about 15% of the world's EDR and is ranked second behind Russia (19%). Australia produces around 16% of the world's iron ore and is ranked third behind China (32%) and Brazil (19%).

Rio Tinto Iron Ore: At Yandicoogina, mining at the US$530 million Junction South East (JSE) project began in May 2007. This expanded the capacity of Yandicoogina from 26 to 52 Mtpa and included an additional rail loop and train load out. Site works commenced in December 2007 on the US$1 521 million Brockman Syncline 4 (BS4) project located about 60 km north west of Tom Price. Commissioning of the 22 Mtpa project is expected begin in early 2010 with an allowance for an increase in output to 36 Mtpa to be included in Phase 1. The mine will be connected to the Pilbara Iron rail network by a 35 km rail spur to the Brockman 2 operation. In February 2008 Rio Tinto announced a significant resource had been identified at Caliwingina which is located about 100 km north north west of Tom Price.

The Mesa A and Warramboo deposits located about 50 km from Pannawonica are being developed to replace the Mesa J operation which will cease in 2010. In January 2008 site works started on the US$901 million project which will have an initial capacity of 20 Mtpa in 2010 rising to 25 Mtpa in 2011. A 49 km rail extension will connect the new mine to the Rio Tinto rail network. Current production from Mesa J will reduce to 7 Mtpa of sub-grade material to be processed in scrubber plants until 2015.

BHP Billiton: Commissioning activities for the US$1.5 billion Rapid Growth Project 3 (RGP3) began at the end of 2007. RGP3 included the development of Deposit E and an overland conveyor as well as new crushing and screening facilities at Mining Area C to increase capacity from 22 to 42 Mtpa. RGP3 also increased rail and port capacity by 20 Mtpa to 129 Mtpa. In March 2007 the US$2.1 billion RGP4 project was approved and is expected to deliver a mine, rail and port capacity of 155 Mtpa in the first half of 2010. The RGP4 project includes increasing production at Yandi to 45 Mtpa, developing a new crushing and screening plant and additional stockyards, car dumping and train loading facilities. Since 2002 BHP Billiton has spent US$4.9 billion on increasing capacity by 77 Mtpa to 155 Mtpa on the Pilbara operations.

In February 2008 BHP Billiton announced the approval of US$1.094 billion for Rapid Growth Project 5 (RGP5) which is expected to increase installed capacity from 155 Mtpa to more than 200 Mtpa in 2011. RGP5 will include the duplication of the rail line between the Yandi mine and Port Hedland, the expansion of the inner harbour at Port Hedland and the expansion of capacity at the Yandi and Area C mines.

Fortescue Mining Group Ltd (FMG): Mining activities at the 45 Mtpa Cloud Break project commenced in September 2007. The first loaded train is expected to arrive at Port Hedland in April 2008 and the first shipment is scheduled to leave port in May 2008. The capital cost is forecast to be $2.6 billion (excluding financing costs). The 255 km rail line will have a capacity of 70 Mtpa of which 45 Mt will be for FMG leaving the rest for junior miners. Planning is being undertaken to bring forward the construction of a lump circuit at the mine, the construction of a third de-sand plant, the commissioning of a second ship berth and the improvement of rail capacity by a super lift (placing more ballast under track). These optimisation initiatives could deliver 55 Mtpa in 2009 and up to 100 Mtpa in 2010. In November 2007 FMG announced that a significant resource had been identified at the Solomon deposit located about 60 km north of Tom Price.

Hancock Prospecting: The first production blast at the US$980 million 22 Mtpa Hope Downs project (50:50 owned by Rio Tinto and Hancock Prospecting) occurred in July 2007 and the first ore reached the Port of Dampier in December 2007. A Stage 2 US$350 million expansion at the Hope Downs 1 South deposit is expected to increase production from the Hope Downs project by 8 Mtpa to 30 Mtpa in early 2009. In December 2007 Rio Tinto (the operator) announced a US$71 million feasibility study to investigate the expansion of production from the Hope Downs 4 deposit located 45 km east of the Hope Downs 1 mine. During 2008 Hancock Prospecting plan to prepare a Bankable Feasibility Study on the Roy Hill 1 deposit located 300 km south east of Port Hedland. Construction is planned to commence in 2009 with a 2011 mine start-up date.

Portman Ltd: At the Koolyanobbing project Portman is studying a number of expansion options in consultation with rail and port service providers. Portman also is studying the beneficiation of lower grade ores to increase the ore reserve base. In September 2007 a new contractor started mining, crushing and screening services at the project. The product is transported 578 km by rail to the Port of Esperance for export. On Cockatoo Island Phase 2, mining is due to end in June 2008 but a Phase 3 mining plan has been approved in principle subject to a number of conditions being resolved. Phase 3 includes building a double seawall to enable mining to go to a depth of 60 m below sea level and adding four years to the life of the mine. Environmental remediation commenced in the September Quarter of 2007.

Mount Gibson Iron Ltd: At Tallering Peak during 2007 development of the T3C and T6A pits exposed high grade hematite. The mine produces about 3 Mtpa and has a current mine life of about 6 years. There is a possibility of extending the mine's life with the development of the area called T1 as well as extending the resource below the existing Main Range T2 pit. At Koolan Island, the first shipment from new berth and load out facilities occurred in June 2007. Currently, mining is occurring in satellite deposits including Eastern and Mullet-Acacia pits until access to the Main Pit orebody is available. The cutback of the Main Pit commenced in December 2007 along with the construction of the seawall across Arbitration Cove. Dewatering and footwall rehabilitation could take up to 18 months to complete. The planned pit floor will be 160 m below sea level. At the Extension Hill project a Definitive Feasibility Study was completed in early 2007 with a plan to mine 3 Mtpa over an initial four year mine life. Ore would be trucked 85 km to Perenjori then railed 239 km to Geraldton. Construction of the $84 million project is expected to commence in the March Quarter of 2008 subject to permitting approvals with production due to start in early 2009.

Asia Iron Pty Ltd: Plans to produce 5 Mtpa of concentrate from the Extension Hill magnetite deposit commencing in 2010. The project will cost $715 million and includes a 280 km slurry pipeline to Geraldton.

Murchison Metals Ltd: The $44 million Stage 1 Jack Hills project shipped the first ore from the Port of Geraldton in February 2007. Stage 1 involves producing 2 Mtpa over a 5 year mine plan using contract mining, crushing and screening and contract road haulage 540 km to the Port of Geraldton. In 2007 the Stage 1 pits were optimised using geological knowledge gained from the first six months of mining to reduce the strip ratio to 4:1. Murchison expects that a fines product produced from beneficiation of low grade ore will add another high grade product from Jack Hills. A $2.6 billion Stage 2 Jack Hills project is planned to produce 25 Mtpa commencing in 2011. Stage 2 will require a 560 km multi-user rail line and a new port at Oakajee near Geraldton. A $20 million bankable feasibility study is expected to be completed in 2008.

Midwest Corporation Ltd: Midwest is planning to transfer ore haulage from road to rail between the Koolanooka operation and Geraldton by June 2008. Midwest has sufficient ore in stockpiles until June 2008 at which time it expects the Stage 2 hard rock mines to commence at Koolanooka and Blue Hills. Annual production will be restricted to 1.5 Mt with operations planned to start once approvals have been granted. At the $579 million Weld Range project a 15 Mtpa direct shipping ore operation is planned to commence in 2011 with an initial 15 year mine life. Rail and port infrastructure is to be provided by Yilgarn Infrastructure Ltd. A pre-feasibility study is expected to be completed in September 2008 and a Bankable Feasibility Study in mid-2009. Midwest also is planning a 10 Mtpa mine at Jack Hills to start in 2013. The $1 billion Koolanooka magnetite project, 160 km south east of Geraldton, is planned to produce 6 Mtpa of concentrate or pellets for an initial 20 years.

Grange Resources Ltd: Grange is planning to mine the US$625 million Southdown magnetite project at a rate of 17.8 Mtpa to produce 6.6 Mtpa of concentrate over an initial 22 year mine life. The concentrate will be pumped 105 km via a slurry pipeline to the Port of Albany and exported to a pellet plant located in Kemamam, Malaysia. Construction of the US$1.175 billion Southdown-Kememam Project is expected to commence in early 2009 with pellet production to begin in 2011.

Gindalbie Metals Ltd: At the $94 million Mungada direct shipping ore project Gindalbie plans to mine 3 Mtpa over an initial six year mine life. A Bankable Feasibility Study completed in September 2007 included an initial 85 km road haul to Morawa and 200 km by rail to Geraldton for export. Production is planned to commence in 2009 subject to approvals. At the $1.6 billion Karara magnetite project located 225 km south east of Geraldton, Gindalbie plans to mine 20 Mtpa of ore to produce 8 Mtpa of concentrate. The Bankable Feasibility Study was completed in September 2007 and concluded that rail transport to Geraldton was the preferred method of transport. The first concentrates are expected to be produced in 2010 and the project has an initial mine life of 25 years.

Atlas Iron Ltd: A Definitive Feasibility Study was completed in July 2007 on the $9.9 million Pardoo Project located 75 km east of Port Hedland. Altas is planning to commence a 1 Mtpa direct shipping ore operation in October 2008 by trucking ore to the public access port facilities at Port Hedland. Altas proposes spending another $14.5 million to expand the operation to 3 Mtpa by 2010. A Scoping Study was completed in late 2007 on the Abydos Project located 100 km south of Port Hedland. Plans exist for a $38.5 million operation producing 3 Mtpa of direct shipping ore which would be trucked to Port Hedland for export. A pre-feasibility study on the Pardoo magnetite deposit is expected to be completed in October 2008.

Cape Lambert Iron Ore Ltd : The $600 million Cape Lambert magnetite project is only 5 km from the coast near Karratha. The company plans to produce 7 Mtpa of concentrate from 2010 over an initial 20 year mine life. A Bankable Feasibility Study is expected to be completed in mid-2008.

CITIC Pacific Mining: The $5.2 billion Sino Iron Ore Project is based on the Balmoral Central magnetite deposit located about 100 km south west of Karratha. CITIC plans to export 27.6 Mtpa of concentrate and pellets over 25 years commencing in 2009. The development includes magnetic concentrator, pellets plant, port facilities at Cape Preston, a 450 MW gas fired power station and a desalination plant.

Australasian Resources Ltd (ARL): The $2.6 billion Balmoral South magnetite project is planned to mine 42 Mtpa of ore to produce 5.2 Mtpa of concentrate, 4.9 Mtpa of pellets and 1.45 Mtpa of hot briquetted iron (HBI). The Bankable Feasibility Study is due to be completed in March 2008 with concentrate being produced from 2010 and pellets in 2011 followed by HBI. ARL plans to share port facilities at Cape Preston with CITIC on a pro-rata cost basis.

Golden West Resources Ltd: At the Wiluna West project located 40 km west of Wiluna, a 10 Mtpa direct shipping ore operation is proposed to commence in 2011. Ore would be transported by rail to either Esperance or Oakajee depending of the outcomes of a pre-feasibility study due to be completed in mid-2008.

Ferrowest Ltd: Ferrowest plans to develop a $437 million 0.5 Mtpa pig iron plant at Eradu, 98 km east of Geraldton. A 2.4 Mtpa mine would be required at the Yogi magnetite deposit located 120 km to the east.

Aurox Resources Ltd: At Balla Balla, located about 90 km east of Karratha, Aurox plans to construct a $603 million concentration plant to produce 6 Mtpa of a vanadium rich titanomagnetite concentrate. A Bankable Feasibility Study was completed in October 2007 and commissioning is expected in mid-2010. Aurox plans to transport the product to Port Hedland via a 110 km slurry pipeline.

Australian Premium Iron Joint Venture: The joint venture plans to commence the $2 billion 25 Mtpa West Pilbara Iron Ore Project in 2011 based on three deposits located about 50 km south west of Pannawonica.

Iron Ore Holdings Ltd: A 1.5 Mtpa direct shipping ore operation is planned to commence in 2010 at the Phil's Creek Project located about 10 km east of the Yandi mine.

FerrAus Ltd: A 2 Mtpa direct shipping ore operation is planned to commence in 2009 at the Robertson Range Project. Ore would be trucked 50 km to the Jimblebar mine then taken by rail to Port Hedland for export.

Brockman Resources Ltd: The $300 million Marillana Iron Ore Project is planned to produce up to 10 Mtpa from 2012. A pre-feasibility study for the project, which is located 100 km north west of Newman, is expected at the end of 2008.

OneSteel Ltd: In early 2007 exports of hematite began from the port at Whyalla in South Australia. OneSteel plans to export 4 Mtpa of hematite over 10 years from the Iron Magnet project. Ore is transhipped by barge 8 km offshore to Cape size vessels (160,000 t). Construction of the magnetite infrastructure for the $395 million Project Magnet Expansion program was completed in the first half of 2007 and changeover to a pellet feed to the blast furnace occurred at the end of 2007. Project Magnet has extended the life of the Whyalla steelworks from 2020 to 2027 and has lowered the cost of steel production.

Western Plains Resources Ltd (WPG): A Bankable Feasibility Study on the $109 million Peculiar Knob direct shipping ore project located 100 km south east of Coober Pedy in South Australia was completed in September 2007. The study envisages a 2.7 Mtpa operation over six years with an 85 km haul road to the Wirrida siding for delivery by rail to a port such as Darwin, Port Pirie or Port Bonython. Mining is expected to begin in mid-2008 with exports starting in early 2009. Planning is underway to extend the life of the project by developing the Buzzard hematite deposit at the nearby Hawks Nest project. WPG also is proposing to develop a magnetite mine at the Hawks Nest project by 2011 with a capacity of 8 Mtpa of concentrate over a 50 year mine life.

IMX Resources NL: Trial mining is expected to commence in early 2008 at the $41.6 million Cairn Hill project located 55km south east of Coober Pedy in South Australia. Run-Of-Mine magnetite ore will be taken 58 km by truck to the Wirrida rail siding and taken by rail to Darwin for export to China. Full production of 1.4 Mtpa is expected in mid-2008 with the first shipment at the end of 2008. Approximately 7.3 Mt of ore averaging 50.9% Fe, 0.43% copper (Cu) and 0.13g/t gold (Au) will be produced over an initial 5.5 year mine life.

Centrex Metals Ltd: Mining at the $10 million Wilgerup hematite project located 30 km south east of Lock in South Australia is expected to begin in August 2008 with first shipments in early 2009. The 2 Mtpa five year project will take direct shipping ore 17 km by truck to a rail siding near Tooligee for transport to a port such as Port Lincoln.

Ironclad Mining Ltd: A $296 million 2 Mtpa magnetite concentrate project is proposed for the Wilcherry Hill deposit located 90 km west north west of Whyalla in South Australia. A feasibility study is due to be completed by the end of 2008 with production commencing in 2010.

Jiangsu Shagang: In 2007, work started on a major pre-strip operation designed to extend the life of the Savage River mine through to 2022. The removal of about 56 Mtpa of overburden by truck and shovel will provide 6 Mtpa of magnetite ore to produce 2.5 Mtpa of concentrate for pellet production. Savage River is located 110 km south west of Burnie in Tasmania.

Gujarat NRE Resources NL: At the Nelson Bay River deposit located 70 km south west of Smithton in Tasmania, bulk sampling indicated favourable results for the production of a marketable magnetite concentrate for the heavy media market. Gujarat intends to update the previous conceptual mine study.

Territory Iron Ltd: In April 2007 mining started at the $15 million Frances Creek project located 180 km south of Darwin in the Northern Territory. The first ore from the 1.5 Mtpa project was transported by rail in July 2007and the first shipment of 67,500 t of iron ore left Darwin in September. Territory Resources plans to increase production to 3 Mtpa by 2009. A $32.5 million development of and improvement to the Darwin port facilities was completed in the first half of 2007.

Peko Rehabilitation Project Pty Ltd: In May 2007 a 50 ktpa magnetite tailings re-treatment plant was commissioned at the historic Peko mine near Tennant Creek in the Northern Territory. Approximately 3.9 Mt of tailings is planned to be re-treated over 6 to 7 years to produce a premium grade magnetite suitable for coal washeries. The tailings re-treatment will allow the rehabilitation of the old Peko mine.

FerroMin Pty Ltd: Council approval has been granted for the $2 million Broula open-cut mine located 19 km west south west of Cowra in New South Wales. The mine is expected to yield 1.3 Mt of magnetite, 0.15 Mt of hematite and 0.9 Mt of limestone over 15 years. The magnetite would be for use in coal washeries, the hematite in cement or steel production and the limestone in agriculture or as a mineral filler.

Operating and proposed Direct Reduced Iron (DRI) and steelworks in Australia include:

• Steel production at Port Kembla, Whyalla, Rooty Hill, Mayfield and Laverton North.
• HIsmelt: The world's first commercial HIsmelt facility at Kwinana in Western Australia is now two years into a three year ramp-up to full capacity of 800 ktpa in 2008.
• Ferrowest Ltd: A $437 million 0.5 Mtpa pig iron plant is planned to be located at Eradu in Western Australia. A $303 million Stage 2 project is planned to increase production to 1 Mtpa. A Definitive Engineering Study is due for completion at the end of 2008 with commencement proposed for mid-2011. Ferrowest has sent a sample of concentrate from the projects Yogi magnetite deposit to Japan to determine the suitability for use in two Midrex pig iron processes.
• Boulder Steel Ltd: The company plans to produce 400 ktpa of seamless tubes per year in Ipswich, Queensland. The $572 million project requires the construction of an electric arc steel mill, a seamless tube mill and a finishing mill. The project is expected to be operating at full capacity in 2011. The Australian Government has granted the proposed steel mill Major Project Facilitation Status.
• Australasian Resources Ltd: The company plans to develop a HBI plant with a capacity of 1.45 Mtpa at Cape Preston, Western Australia.

BHP Billiton: Under Project Quantum BHP Billiton is assessing options for further infrastructure expansions with targets of 300 Mtpa within the next 10 to 20 years. This includes investigating duplication of the 426 km railway from Port Hedland to Newman and studies of the outer harbour development at Port Hedland.

Rio Tinto Iron Ore: At the end of 2007 the US$690 million Dampier Port upgrade from 116 to 140 Mtpa was completed. In February 2007 Rio Tinto announced the US$860 billion expansion of the Cape Lambert port from 55 to 80 Mtpa. When construction is completed in the Fourth Quarter of 2008 Rio Tinto's mine, rail and port capacity in the Pilbara will be capable of exporting 220 Mtpa. Rio Tinto is considering expanding capacity by a further 100 Mtpa to 320 Mtpa.

Port of Geraldton: Construction of the $35 million Berth 5 Iron Ore Expansion Project was completed in late 2007 and the first shipment occurred in January 2008. The Berth 5 project will enable the port to load up to 12 Mtpa of iron ore. Yilgarn Infrastructure Ltd is proposing to construct a $3 billion 60 Mtpa multi-user open-access port at Oakajee 25 km north of Geraldton and a 470 km railway to projects in the Mid-West Region, including the proposed Weld Range and Jack Hills projects. Definitive planning and design studies began in early 2007 with construction expected to start in late 2008 and operations to commence in 2011. Murchison Metals Ltd also has proposed a $2.6 billion port and rail development at Oakajee to service the 25 Mtpa Jack Hills Stage 2 Project.

Port Hedland Port Authority: A new $225 million multi-user public berth with an annual capacity of 18 Mt will be built at Utah Point on Finucane Island and is expected to be operational in the first half of 2009. In October 2007 the Western Australian Government committed almost $1.3 million to assess the feasibility and capacity of a new outer harbour off Finucane Island. Ronsard Island located 80 km west of Port Hedland has been recommended as the site of the Pilbara's next major iron ore port. The port would be a multi-user facility commencing after 2015.

Rio Tinto is investigating the introduction of driverless trains for the Pilbara rail operations. The current trial could lead to significant savings, including an estimated 4% in rail operational efficiency. A decision on automation could be made as early as 2008 and, if implemented it is likely the technology will take up to five years to be fully integrated across the network.

The Fortescue Metals Group introduced the first surface miners into iron ore mining at the Cloud Break mine during 2007. Three $3.2 million Wirtgen 2500SMs are in operation at Cloud Break and 11 more have been ordered. Surface miners theoretically lower mining costs by removing much of the drilling, blasting and crushing which is required in conventional open-pit mines (potentially saving up to $1 per tonne). Surface miners also may prolong tyre life on dump trucks because of smoother pit floors. Both Rio Tinto and BHP Billiton started surface miner trials during 2007. Surface miners need long, straight benches in relatively soft ore.

The CSIRO and Rio Tinto have begun to operate the Fe HyLogger technology which provides a rapid and automated spectroscopic determination of the mineralogy of drill cores and chips along with core logging and grade estimations. The instrument is mounted in a custom built air conditioned container made in Australia by a team at the CSIRO.