Mineral Resources will target China's small mills
Post Date: 12 Jul 2011 Viewed: 396
Peter Wade, executive chairman of Mineral Resources, said the company would initially sell iron ore from its $197 million Carina mine in the southwest of Western Australia to smaller Chinese players via the spot market.
"Our intention is that by the end of October this year we will be producing ore at the mine site and railing it to the port," Mr Wade said.
"And it is our intention to have the first exports through the port at the end of October as well."
Australia's rising tide of iron ore exports is dominated by three large miners: Rio Tinto, BHP Billiton and Fortescue Metals Group.
But, encouraged by current high iron ore prices, several smaller companies have found a valuable niche in developing mines to satisfy China's rising demand for the key steelmaking ingredient.
Mr Wade said Mineral Resources hadn't entered into any sales contracts for Carina, which is forecast to produce 4.4 million tonnes a year initially, with scope to increase to 10 million tonnes in later years.
But the company intends to enter into "longer term" offtake deals based on index pricing once Carina completes its initial production ramp-up in the early part of next year, he said.
Under a deal agreed to last year, freight company QR National will haul Carina's ore 576km via rail to the Kwinana Bulk Terminal for export.
On top of the mine investment, Mineral Resources is spending $44m upgrading facilities at the Kwinana port, which is only 30km south of Perth.
Predominantly an infrastructure services company, Mineral Resources is also growing its "commodities" business, including manganese and iron ore exports out of Port Hedland in the Pilbara.
Carina, which is in the Yilgarn region of Western Australia northeast of Perth, will roughly treble Mineral Resources' current iron ore production, marking it as a significant new supplier to the Chinese market.
Mineral Resources is also looking to Asia for labour after recently winning a contract to build and operate a new processing facility at Fortescue Metals' Christmas Creek iron ore mine in Western Australia.
"We have probably about 300 to 400 positions that we need to fill in the next three months," Mr Wade said.
"In the past three or four years we have been successful in bringing a lot of skilled personnel out of Indonesia and The Philippines and we are back there right now," he said.
Up to 150 people from those two countries will be interviewed for the new positions, he added.
Companies in mineral-rich states such as Western Australia and Queensland are facing labour shortages because of a rush of big energy and mining projects aiming to capitalise on the China boom.