MinRes’ Onslow Iron moves closer to cleaner power, $1.3b haul road sale completed

Mineral Resources’ (ASX: MIN) Onslow iron project in WA is one step closer to more efficient power with construction completed on a dedicated gas pipeline.

Following internal collaboration between MinRes’ energy and engineering and construction divisions, the Ken’s Bore gas pipeline has been developed.

This pipeline extends 16km underground from the Goldfields gas pipeline to the gas fire power station at the Ken’s Bore mine site.

Construction was undertaken from March to August 2024 and the pipeline will become fully operational by the end of October, helping reduce Onslow Iron’s dependency on diesel fuel.

MinRes’ energy and construction teams, together with specialised subcontractors, harnessed in-house expertise to help reduce risks associated with scope creep, control costs and maintain flexibility over resource allocation.

The pipeline has been futureproofed with piping upsized to a capacity of 55TJpd, catering for the future electrification of Onslow Iron.

MinRes chief executive of energy Darren Hardy says construction of the Ken’s Bore pipeline highlights the company’s internal expertise and capability.

“By utilising in-house knowledge and expertise from our energy and construction teams, we’ve delivered a project that will drive the electrification of Ken’s Bore,” he said.

“Our energy division continues to support our growth by pursuing access to low-cost, reliable and cleaner fuel to power our operations.”

Chief executive of engineering and construction Darren Killeen says the teams works through several challenges.

“The Ken’s Bore gas pipeline was completed safely and efficiently thanks to a collaborative effort from two of our key business pillars,” he said.

“The quality of work delivered was outstanding, showcasing the significant expertise within our business.”

To further support the energy transition of Onslow Iron, a solar array at Ken’s Bore is planned to be operational by January 2025.

Onslow Iron haul road sale completed

MinRes has also completed the sale of a 49% interest in the Onslow Iron haul road to investment funds managed by Morgan Stanley Infrastructure Partners (MSIP) for $1.3b.

An upfront cash consideration of $1.1b has already been received, with the remaining $200m to be paid subject to the road achieving a run rate of 35wmtpa before June 30, 2026.

Under this partnership, MinRes retains majority ownership and exclusive rights to use, operate and maintain the haul road, as well as majority exposure to the stable earnings the road will deliver over Onslow Iron’s project life.

MinRes managing director Chris Ellison welcomed MSIP as a partner.

“This partnership is yet another strong endorsement of Onslow Iron’s world-class credentials and showcases MinRes’ ability to unlock significant capital from our portfolio of assets,” he said.

The 150km haul road remains scheduled for completion in October 2024.