Iron Ore

Content maintained by Ron Sait

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

Iron (Fe) is ranked fourth in abundance in the Earth's crust and is a major constituent of the Earth's core. Iron rarely occurs as the native metal and is almost always found combined with oxygen as iron oxide minerals such as hematite (Fe2O3), magnetite (Fe3O4), goethite and limonite. Iron ores are rocks from which metallic iron can be economically extracted. Iron ore is one of the raw materials used to make pig iron, the main raw material in steel making. Almost all (98%) of iron ore is used in iron and steel making with small amounts used in areas such as coal washeries and cement manufacturing. When iron is alloyed with elements such as carbon, manganese, vanadium and nickel, harder and stronger steels are produced. Steel is used in many areas of manufacture including motor cars, ships, railway lines and rolling stocks, buildings, pipelines, white goods and heavy equipment.

The State of Western Australia (WA) dominates the Australian iron ore industry with nearly 97% of the total production. The Pilbara region is particularly significant with more than 84% of Australia's total identified resources and almost 92% of the production. Locally significant iron ore mines also operate in the Northern Territory (NT), South Australia (SA), Tasmania (Tas) and New South Wales (NSW).

In 2008, economic demonstrated resources (EDR) increased by 18% to 24 gigatonne (Gt) mainly due to the inclusion of Abydos, Barrambie and Western Turner Syncline for the first time and large increases at the Yandi, Balla Balla, Jimblebar, Marandoo, Marillana, Mining Area C, Mount Karara, Pardoo and West Pilbara deposits. Western Australia has 98% of Australia's EDR with about 86% occurring in the Pilbara district. Magnetite ore currently constitutes 24% or 5.7 Gt of Australia's EDR.

Paramarginal demonstrated resources (PDR) remained constant at 0.3 Gt and subeconomic demonstrated resources (SDR) also remained relatively constant at 1.6 Gt. Inferred resources increased by 18% to 28.9 Gt due the inclusion of Bonnie Creek, Mount Caudan, Railway, Yalleen, Yilgarn Project, Wonmunna and Western Creek for the first time and large increases at Yandi, Balla Balla, Jack Hills, Jimblebar, Marillana, Mount Newman JV and Roy Hill. Western Australia has about 93% of Australia's total identified resources of iron ore with about 84% of the total identified resources occurring in the Pilbara Region.

Almost all EDR is accessible except for the remaining resource of 18 million tonnes (Mt) at Orebody 23 in the Newman District and 30% of the Windarling resource. Both have been quarantined for environmental reasons. The resource life of the accessible EDR of 23.9 Gt is about 70 years.

About 45% of accessible EDR, or 10.8 Gt, is JORC reserves compliant. The resource life of accessible JORC reserves is about 30 years. Rio Tinto and BHP Billiton manage 53% of the JORC reserves and magnetite ore constitutes 29% of the JORC reserves.

The Australian Bureau of Statistics (ABS) data indicates that exploration expenditure for iron ore in 2008 totalled $583 million, a 64.6% increase on the $354.1 million spent in 2007. About $546 million or 93.7% was spent in Western Australia. Iron ore exploration accounted for 22.4% of the total mineral exploration expenditure in Australia in 2008.

The Australian Bureau of Agricultural and Resource Economics (ABARE) reported that Australia's iron ore production in 2008 was 341.1 Mt (299.1 Mt in 2007) with 97% produced in WA. Exports in 2008 totalled 310.2 Mt (267.2 Mt in 2007) with a value of $30.6 billion. ABARE has projected that Australia's iron ore production will increase from 324.7 Mt in 2007-08 to 504.9 in Mt 2013-14. Exports are projected to rise from 294.3 Mt to 473.5 Mt over the same period.

In 2008, Australia had about 15% of world EDR of iron ore and was ranked third after Ukraine (19%) and Russia (16%). In terms of contained iron, Australia has about 17% of the world's EDR and is ranked second behind Russia (19%). Australia produces around 15% of the world's iron ore and is ranked third behind China (35%) and Brazil (18%).

In 2008, three projects commenced iron ore shipments, Cloud Break (Fortescue Metals Group), Hope Downs (Rio Tinto and Hancock Prospecting) and Pardoo (Atlas Iron). The Rio Tinto owned Cape Lambert port expansion to 80 million tonnes per annum (Mtpa) was completed in November 2008 and the Port of Geraldton Berth 5 expansion to 12 Mtpa shipped the first ore in January 2008. Projects that were under construction during 2008 include, Mesa A (Rio Tinto), Brockman 4 (Rio Tinto), Rapid Growth Projects 4 and 5 (BHP Billiton), Sino Iron (CITIC Pacific Mining) and Cairn Hill (IMX Resources). At Port Hedland a new 18 Mtpa multi-user berth was under construction. There are more than 25 proposed iron ore projects which are at various stages of development ranging from scoping studies to marketing.

Industry Developments - Western Australia

Rio Tinto Iron Ore: Site works commenced in January 2008 on the US$901 million Mesa A Project 50 kilometres (km) from Pannawonica in the Pilbara district. The project will have an initial capacity of 20 Mtpa in 2010 rising to 25 Mtpa in 2011. The Mesa A and Warrambo Channel Iron Deposits (CID) resources are being developed to replace the Mesa J operation, which will cease in 2010. Construction of the Brockman Syncline 4 project commenced in December 2007 and is due to be commissioned in 2010 with a capacity of 22 Mtpa. A US$149 million feasibility study is being undertaken into development of the Western Syncline deposit using existing plant and infrastructure at Tom Price. Rio Tinto is investigating increasing production at the Yandicoogina mine by an additional 8 Mtpa to 52 Mtpa.

BHP Billiton: At the end of December 2008, the US$2.15 billion Rapid Growth Project 4 (RGP4) was nearing 70% completion. The project is due for completion in the first half of 2010 and is planned to increase capacity by 26 Mtpa to 155 Mtpa. RGP4 includes increasing production at Yandi to 45 Mtpa, developing a new crushing and screening plant and additional stockyards as well as train dumping facilities. In November 2008, BHP Billiton committed to the US$5.6 billion Rapid Growth Project 5 (RGP5) which is planned to increase the system capacity by 50 Mtpa to 205 Mtpa.

Fortescue Mining Group Ltd (FMG): The first ship to be loaded at the Fortescue Herb Elliott Port was the MV Heng Shan which left for Boasteel in China in May 2008 with 170 000 tonnes of 'rocket' ore. The original capacity of the FMG Cloud Break project was 45 Mtpa although optimisation of the production process has the potential to increase capacity to 55 Mtpa in 2009. In February 2009, mining commenced at the Christmas Creek deposit with the ore being transported by road to the Cloud Break ore processing facility.

Hancock Prospecting: The first Hope Downs ore was shipped from the Port of Dampier in April 2008. Production at the US$364 million Hope Downs Stage 2 commenced in December 2008. The project increased the mine capacity from 22 to 30 Mtpa. A US$71 million feasibility study is investigating the development of the Hope Downs 4 deposit located 45 km east of the Hope Downs 1 mine. At Roy Hill 1 a 55 Mtpa, Marra Mamba ore operation is planned to commence in 2011.

Portman Ltd: In November 2008 Cliffs Natural Resources completed the takeover of Portman Ltd. The company is investigating the potential for the expansion of the Koolyanobbing operations beyond 8.5 Mtpa. At the Cockatoo Island Project construction of the Stage 3 seawall extension commenced in August 2008. Mining is expected to commence in mid-2009 with a two year mine life.

Mount Gibson Iron Ltd: At the 3 Mtpa Tallering Peak and the 4 Mtpa Koolan Island operations overburden cut-backs were suspended in late 2008. Construction at the $84 million Extension Hill project commenced in late 2008. Production of 3 Mtpa over six years is due to commence in 2010.

Extension Hill Pty Ltd: The company plans to produce 5 Mtpa of concentrate from the Extension Hill magnetite deposit commencing in 2011. The project will cost $715 million and includes a 280 km slurry pipeline to Geraldton.

Murchison Metals Ltd: The Jack Hills operation is expected to reach a production capacity of 1.8 Mtpa in 2009 with the commissioning of six new bottom dump triple trailer road trains. The Stage 2 mine feasibility study due for completion in 2009 envisages a 25 Mtpa mine commencing in 2011.

Midwest Corporation Ltd: Rail haulage of iron ore product commenced in late 2008 after the completion of the $3 million Tilley rail siding. The operation, which upgrades low grade stockpiles at Koolanooka, was recommenced in August 2008. Sinosteel Corporation completed a takeover of Midwest Corporation in September 2008. Stage 2 open-pit mining of hematite ore at Koolanooka commenced in late 2008. Midwest is planning to commence a 15 Mtpa direct shipping ore operation at Weld Range and is considering the 6 Mtpa Koolanooka magnetite concentrate project.

Grange Resources Ltd: The US$1.7 billion Southdown Magnetite and Kemaman Pellet Project is expected to produce 6.8 Mtpa of premium grade pellets from 2012. The project consists of a magnetite mine and concentrator at Southdown, a slurry pipeline to export facilities at the Port of Albany and a pellet production plant at Kemaman in Malaysia.

Gindalbie Metals Ltd: The $1.8 billion Karara Project consists of an initial 1.5 Mtpa hematite operation starting in late 2009 followed by an 8 Mtpa magnetite concentrate operation from late 2010. Infrastructure requirements include an 85 km rail spur line to Tilley Siding near Morawa and export shipping facilities at the Port of Geraldton.

Atlas Iron Ltd: Mining at the Pardoo Project commenced in October 2008 and the first shipment left Port Hedland in December 2008. The $18 million project has a capacity of 1 Mtpa and with the expenditure of another $14.5 million the capacity would rise to 3 Mtpa. Atlas is currently using the Fortescue Herb Elliot port facilities. Atlas plans to commence production at the $10 million Wodgina Project in 2010. The planned 2 Mtpa of production will be trucked 100 km to Port Hedland for export. The $50 million Abydos Project, located 120 km south of Port Hedland, is expected to start in 2011 at a rate of 3 Mtpa. A preliminary feasibility study is due to be completed in 2009 on the Ridley Magnetite Project near the Pardoo Project.

China Metallurgical Group Corporation (MCC): In August 2008, Cape Lambert Pty Ltd completed the $400 million sale of the Cape Lambert magnetite project to MCC. The $600 million Cape Lambert magnetite project is only 5 km from the coast near Karratha. There is a plan to produce 7 Mtpa of concentrate during an initial 20 year mine life.

CITIC Pacific Mining: Construction of the $5.2 billion Sino iron ore project commenced in early 2008. Development of the Balmoral Central magnetite deposit during 2008 included bulk sampling, pre-stripping of overburden and bulk earthworks. When production commences in late 2009, 27.6 Mtpa of magnetite concentrates and pellets will be exported. Infrastructure will include a 450 megawatt (MW) gas fired power station, a desalination plant and a port at Cape Preston.

Australasian Resources Ltd (ARL): A bankable feasibility study on the $2.7 billion Balmoral South Project was completed in June 2008. ARL plans to mine 40 Mtpa of magnetite ore commencing in 2011 to produce 12 Mtpa of product, including 5 Mtpa of concentrates and 7 Mtpa of blast furnace pellets.

Golden West Resources Ltd: The Wiluna West Project is located 35 km southwest of Wiluna. The company is investigating commencing a 10 Mtpa direct shipping ore operation with product transported to either Oakajee or Esperance for export.

BC Iron Ltd: The $20 million Nullagine Iron Ore Project is planned to produce 1.5 Mtpa of direct shipping ore (DSO) by 2010. The project is located close to the infrastructure at Fortescue Metal Groups Cloud Break operation.

Ferrowest Ltd: The $700 million Yalgoo Iron Project located 14 km east of Yalgoo is aimed at producing pig iron from the Yogi magnetite deposit. The 1 Mtpa pig iron operation is expected to commence in 2012.

Aurox Resources Ltd: The proposed $1 billion Balla Balla Titanomagnetite Project is expected to produce 6 Mtpa of concentrate (58% Fe, 1% V2O5 & 14% TiO2) from 2010 over an initial 15 year mine life. The concentrate will be transported to Port Hedland via a 110 km slurry pipeline. A phosphate rich overburden could potentially produce up to 1 Mtpa of a saleable phosphate product.

Australian Premium Iron Joint Venture: At the West Pilbara Iron Ore Project a 25 to 30 Mtpa operation, including port and rail infrastructure, is estimated to cost US$3.9 billion. The first shipments are planned to start in 2012.

Iron Ore Holdings Ltd: In July 2008, the company entered into an arrangement with Rio Tinto for mine-gate iron ore sales of up to 1.5 Mtpa of pisolite ore per annum. The $10 million project is anticipated to start in late 2010 with trucks hauling ore 9 km from Phil's Creek to the Yandicoogina ore stockpiles.

FerrAus Ltd: A number of options are being considered to develop the Davidson Creek and Robertson Range iron ore deposits including a 2 Mtpa operation that would truck ore 50 km to the Jimblebar mine for railing to Port Hedland.

Brockman Resources Ltd: The company intends to commence mining at the Marillana Project at a rate of 15 to 25 Mtpa in 2012.

Polaris Metals NL: The $120 million Stage 1 Yilgarn Iron Ore Project is located 60 km north of Koolyanobbing. Polaris is investigating an initial production of 2.5 Mtpa from the Carina deposit. Ore would be trucked to a siding on the Trans Australia rail line and then railed to either Fremantle or Esperance for export.

United Minerals Corporation: At the Railway Marra Mamba deposit a number of development options are being considered. The 10 Mtpa preferred option includes the construction of a rail spur to a nearby rail line with production commencing in 2011.

Moly Mines Ltd: At Spinifex Ridge a $12 million 1 Mtpa open-pit mine is proposed to start in 2010 with an initial five year mine life. Iron ore is planned to be trucked 170 km to Port Hedland for export.

Industry Developments - South Australia, Tasmania and Northern Territory

OneSteel Ltd: In February 2008 OneSteel announced Project Magnet Phase 2 at the Whyalla operation in South Australia. Onesteel plans to increase iron ore reserves and increase iron ore exports to 6 Mtpa by 2010.

Western Plains Resources Ltd (WPR): In January 2009 the Commonwealth of Australia granted formal approval for the construction of the Peculiar Knob mine inside the Woomera Prohibited Area in South Australia. WPR plans to develop the $62 million Peculiar Knob Project at 3 Mtpa from 2009 with the Buzzard and Tui deposits brought into production one to two years later. Product would be trucked 85 km to the Wirrida Siding then railed to a port for export. WPR is investigating producing 6 Mtpa of magnetite concentrates from the Hawks Nest deposit from 2012.

IMX Resources NL: In mid-2008 trial mining was undertaken at the Cairn Hill magnetite-copper-gold project in South Australia. A $54 million Phase 1 operation aims to produce up to 1.4 Mtpa of run-of-mine ore commencing in 2009. IMX Resources plans to truck ore 58 km to the Wirrida rail siding followed by rail haulage to Darwin for export to the Tonghua Mining processing plant in China.

Centrex Metals Ltd: At the Wilgerup hematite project on the Eyre Peninsula of SA a 1.6 Mtpa operation is planned to commence in 2010 over an initial six year mine life. The ore will be trucked 17 km to the Tooligee rail siding then railed to a port such as Port Lincoln for export.

Ironclad Mining Ltd: The Wilcherry Hill Project is located on the Eyre Peninsula of SA. A bankable feasibility study investigating a possible 2 Mtpa magnetite concentrate operation is expected to be completed in 2009.

Grange Resources Ltd: At Savage River in Tas a $90 million expansion is planned to increase production from 2.3 Mtpa of pellets to 2.9 Mtpa by 2011. In January 2009 a merger was completed between Grange Resources and Australian Bulk Minerals the manager of the operation.

Territory Iron Ltd: At Frances Creek in the NT a mobile wet plant and an additional crushing plant was commissioned in January 2009 to increase capacity to 3 Mtpa.

Industry Developments - Iron and Steel

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

Bluescope Steel Ltd: Steel production at Port Kembla.

Onesteel Ltd: Steel production at Whyalla, Rooty Hill, Mayfield and Laverton North.

HIsmelt: In early 2009 operations at the HIsmelt facility at Kwinana in WA were placed on care and maintenance.

Ferrowest Ltd: A 1 Mtpa pig iron project is planned to commence at Yalgoo in WA in 2012. Ferrowest plans to use the Midrex Technologies ITmk3 process to produce the pig iron.

Boulder Steel Ltd: A $700 million seamless tube plant is planned to be built at Gladstone in Queensland. The 400 ktpa project includes the construction of a pig iron plant.

Industry Developments - Infrastructure

BHP Billiton: BHP Billiton is undertaking a pre-feasibility study which is targeting an iron ore system capacity of 240 Mtpa by 2012. The Quantum Project is considering the development of the Outer Harbour at Port Hedland. Stage 1 envisages increasing capacity to 300 Mtpa by 2015 with Stage 2 further increasing the iron ore system capacity to 350 Mtpa.

Rio Tinto Iron Ore: In November 2008 the US$860 million Cape Lambert expansion project was completed, increasing port capacity from 55 to 80 Mtpa. Rio Tinto is planning the Cape Lambert 180 Project to increase port capacity to 180 Mtpa. The Remote Operations Centre, which will manage the Pilbara mines and infrastructure 1300 km away near the Perth Airport, is scheduled for completion in 2009.

Port Hedland Port Authority: A new $225 million multi-user berth is expected to be operational in 2009 with a capacity of 18 Mtpa. Shipping began from the 45 Mtpa Fortescue Herb Elliot Port in May 2008 and a second berth was completed in December 2008.

Port of Geraldton: The $35 million Berth 5 Iron Ore Expansion Project shipped the first ore in January 2008. The expansion project increased the port's iron ore handling capacity to 12 Mtpa. Oakajee Port and Rail Pty Ltd (Murchison Metals 50%) was selected in July 2008 by the Western Australian Government as the preferred developer of the Oakajee deep water port located 25 km north of Geraldton.

Port Bonython: In October 2008, the South Australian Government awarded preferred tenderer status for the development of Port Bonython to the Spencer Gulf PortLink Consortium. The new iron ore port is expected to be operational in 2011.