A Chinese steel maker and an Australian iron ore explorer have signed a joint venture agreement to develop a new deep water port in South Australia that will be the fi rst in thestate capable of handling Cape-size ships.
Centrex Metals announced in mid-March that it had entered into a partnership with Wugang Australian Resources Investment (WARI), a subsidiary of major steel maker Wuhan Iron and Steel Company (WISCO), to design, build and operate the proposed Port Spencer. The port, which was assigned major development status by the South Australia Government in 2010, will be used to export iron ore and grain from the Eyre Peninsula. It will be capable of loading vessels of up to 200,000t and will have a shiploader rate of 5000 tonnes per hour for iron ore.
In the long term, there will also be a provision for rail access. Centrex has granted the newly-formed JV company Port Spencer Pty Ltd, owned equally by Centrex and WARI, a long-term lease for the land on which the port infrastructure will be situated. A bankable feasibility study will be undertaken for the project, prior to a decision being made by the JV partners regarding whether or not to proceed with construction, by late 2012 or early 2013. Centrex and WISCO are already 40:60 JV partners in Eyre Iron, which is developing signifi cant magnetite iron ore mines and a processing plant to the west of the proposed Port Spencer site.
Centrex managing director Jim White said in a statement that the new JV was an indication of WISCO’s commercial confidence in multiple iron ore mine developments on the Eyre Peninsula.
“Eyre Iron has been on the ground exploring west of Port Spencer for the past 20 months and we now have sufficient confidence in the potential forward outcomes of that exploration and development program to parallel progress the development of an export port,” he said. “Significantly, the new agreement further strengthens the relationship between WISCO and Centrex in the development of magnetite iron ore mines on the Eyre Peninsula.” If a decision is made to proceed with Port Spencer it will be developed in four stages. Stage 1 will comprise a facility enabling the export of hematite iron ore from Centrex’s wholly-owned Wilgerup deposit on Central Eyre Peninsula and grain from the surrounding agricultural industry. An estimated $250 million will be spent on the Stage 1 development (including a possible provisional estimate of 30 per cent over or under-spend), which will include: the design and construction of a jetty, outloading materials handling system and shiploader; establishment of site access and on-site services; and site preparation for receival and storage facilities.
Stage 2 will involve the export of magnetite iron ore and will therefore be subject to further development approvals. The scope of works for this stage will include the development of a plant to desalinate water which will be used in the mine operations and port use, as well as magnetite iron ore
storage and processing infrastructure. Third and fourth stage expansions of Port Spencer will be dependent on the growth of the Eyre Peninsula resources industry. “We see today’s port JV announcement as a real stepping stone to a substantial new economic, resources and infrastructure era for
Southern Eyre Peninsula,” Mr White said.
A Public Environmental Report for Stage 1 has been released by the South Australia Government, and will remain open for public and regulatory comment until April 27.
Meanwhile, Eyre Iron will soon make a decision regarding the development of a magnetite iron ore mine andconcentrate processing plant. Centrex is also part of another JV in the Eyre Peninsula with China’s Baotou Iron and Steel Group. Centrex stated that it expected any commercialoutcomes of the JV with Baotou would see that JV’s product also exported via Port Spencer.
By Rachel Seeley