Fenix rising 

Australia’s iron ore industry is best in class. With excellent proximity to Asia’s high efficiency and high-volume steel industry, Australia has left no stone unturned when it comes to realising our resource potential across exploration, infrastructure and processing. 

The commodity currently faces a rocky road, with falling global steel demand and declining production out of China impacting prices. But Australian iron ore has proven its grit — riding out the turbulence across the mine-to-market value chain. 

Borne out of the rises and falls, Fenix Resources (ASX: FEX) has absorbed the dynamics of the iron ore industry into its business strategy, firing up a unique growth plan built on a solid foundation. This foundation comprises a three-pronged approach which fully integrates Fenix’s mining, logistics and port services business with assets in the Mid-West region of WA.  

Fenix is truly a pit to port operation — mining, transporting, storing and shipping its own ore, allowing it to whether fluctuations in the market and rise above, with a hot growth plan driving its success. 

The company started as a traditional exploration development junior ASX-listed company. The successful development of its Iron Ridge mine, which hosts some of the highest-grade iron ore in WA according to the company, sparked the transformation into a transport and logistics business. This transformation paid off, with the flagship project now producing high margin, premium iron ore at a steady-state run-rate of 1.4mtpa. 

Fenix Resources executive chairman John Welborn speaks with the Australian Mining Review on how Fenix Resources’ three pillar approach allows the company to unlock value across projects. 

“The business has now morphed and transformed into a logistics business that has the potential to unlock value on isolated deposits,” Mr Welborn said. 

“One of the key things about the business model is the return on invested capital. 

“We started as a small company — and many would say we’re still a small company — but we have huge ambitions. 

“Most bulk commodity producers with huge ambitions are by necessity tied to huge capital requirements. 

“Most bulk commodity projects need the construction of a port or the construction of a railway which could amount to billions and billions of dollars. 

“The exciting thing about our business model is that we’ve never had to borrow a significant amount of money or deploy huge amounts of capital with long timelines.” 

This approach has allowed Fenix to ride out market fluctuations and volatile price environments. According to the company, at Iron Ridge, Fenix last raised $15m in capital from the market in 2020 to develop the feasibility study for Iron Ridge. Since then, the company has paid $65m back to shareholders in dividends, invested more than $200m of operating cash flow into the business to own port assets, haulage assets, land assets, depots and training centres and mines and other infrastructure.  

“We are very focused on having short timelines and not investing huge amounts of capital. 

 “We make sure that we get our capital back on a very quick timeframe,” Mr Welborn said.  

“The other way that we’re managing market fluctuations is to be very focused on moving our projects down the cost curve. 

“Generally smaller mines are very high on the cost curve, because it’s hard to mine bulk the commodities at small scale and get synergies.  

“The way we do that is by taking direct control of cost centres that are usually outsourced.  

“By collapsing the margins on the largest cost components of our business, it makes us robust and allows us a lot of control, so that if and when iron ore prices fall, we can adjust volumes, our costs and business accordingly.” 

Now, Fenix is looking to similarly catalyse success at other operations, with the addition of production from the Shine iron ore mine and the Beebyn-W11 project. 

“We’re focusing on using our infrastructure to expand,” Mr Welborn said. 

“We’ve added the shine iron ore mine at 1.2mtpa and in the next couple of months we’ll add our third mine, a green fields project called Beebyn-W11 which will be a 1.5mtpa mine.  

“That will make us a 4mtpa producer, which is very exciting at the current iron ore prices.” 

Time to shine

In H2 CY24, Fenix commenced operating from its newly developed iron ore mine, Shine, which was self-funded from free cashflow, commissioned on time and on budget. 

Shine was acquired as part of Fenix’s 2023 purchase of Mt Gibson assets, with the mine being on care and maintenance before the successful restart. Shine commenced operations during August 2024 and has been operating at the full expected stage 1 

production capacity of about 100kwmt per month since the start of 2025.  

During H1 FY25 ore mined was 372kwmt, ore produced was 341kwmt and ore hauled was 270kwmt. As a result of Shine commencing operations Fenix’s annualised production rate has now increased to about 2.5mtpa for CY25 with the commissioning of Beebyn-W11, expected to bump the production rate to the 4mtpa target during 2025. 

Building Beebyn-W11

Beebyn-W11 will be the boost that enables Fenix to become a 4mtpa producer. In 2023, Fenix secured the exclusive right to mine and export up to 10mdmt of iron ore from the high-quality iron ore deposit, about 20km from Iron Ridge. 

In July 2024, Fenix completed a definitive feasibility study for Beebyn-W11 which outlined exceptional returns over a seven year mine life at an annual production rate of 1.5mtpa.  

Fenix has now commenced site works at Beebyn-W11. Commencement of earthworks and construction activities follows receipt of all required approvals including the native vegetation clearing permit from the WA Department of Energy, Mines, Industry Regulation and Safety (DEMIRS). 

Construction of a new 17.6km private haul road has also commenced. The haul road will connect Beebyn-W11 to Fenix’s existing operations at Iron Ridge, allowing for direct haulage to Geraldton Port using Fenix’s existing integrated transport logistics solutions.  

The expansion of Fenix’s existing accommodation village in the Weld Range is underway and will result in one central facility to support the company’s workforce for Iron Ridge and Beebyn-W11. Earthworks and initial clearing of the mine site at Beebyn-W11 are now underway. 

Another major milestone has been met, with Fenix signing a contract with MACA for drill and blast, mining and crushing and screening operations at Beebyn-W11. 

“MACA was our foundation contractor at Iron ridge and it’s logical that they have been successful in winning the tender for the Beebyn-W11 mine, just 20km away,” Mr Welborn said. 

“Fenix and MACA will be able to capture synergies from those two operations which are very similar and have a lot of shared services, such as the accommodation camp and some of the workshops.” 

Mr Wellborn also comments on the importance of partnerships beyond MACA, including the shires, transport logistics businesses and Traditional Owners. 

“The most significant partnership in that part of the world is the Traditional Owners, the Wajarri Yamaji. It’s a very sensitive area that we mine in, so we mine in cooperation with them,” he said. 

Fenix is proud to have a strong indigenous representation in the company’s workforce and to be in partnership with leading local and national service providers 

Fenix Growth Ambition

In February, Feniz launched a takeover offer for CZR (ASX: CZR), demonstrating an appetite for further opportunities to expand the business model. Fenix identified that their Mid-West operational excellence was a good match with CZR’s large-scale Pilbara iron ore assets and the ambition to create a Southern Pilbara version of Fenix’s fully integrated mine, haulage, and port operations.  

Fenix hopes this acquisition will create a new western force in iron ore. But Mr Wellborn says this acquisition represents a very small part of what the company is possible of achieving, 

“We are a company that can successfully provide the infrastructure and the skills required to unlock the value from otherwise isolated mineral projects,” he said. 

“It’s what we achieved at Iron Ridge and Shine and it’s what we’re about to do at Beebyn — we want to do that all over the Midwest.  

“Initially the board of CZR unanimously recommended the acceptance of Fenix’s takeover offer before ultimately receiving a superior proposal from Rio Tinto led Robe River Joint Venture. 

“In April, Fenix announced that the company would not provide any further counter proposal and allowed the bid to expire. 

“Although we are disappointed not to have secured CZR, we are comforted that the Rio Tinto proposal demonstrates that we had successfully identified a high value opportunity. 

“More importantly, we are committed to being disciplined with M&A and with how and where we invest shareholder capital. 

“Fenix will continue to search out new opportunities to complement our existing Mid-West business.  

“We know there are similar opportunities where quality ore bodies have been identified, but the absence of a railway or port has meant that the benefits of that ore body to the Traditional owners, the WA Government, the Federal government, the local community and potential customers has remained locked in the ground. 

“We have shown we can establish a state-of-the-art transport logistics business that has the skills to transport bulk commodities long distances and connect to port solutions that allow value to be realised both for Fenix and also unlock value for all shareholders. 

“Most mining companies are only interested in unlocking their own solutions, whereas Fenix is very interested in unlocking the value of not only the commodities we mine and control and sell, but also doing that efficiently, effectively and profitably for third parties.”