Mineral Resources Limited (ASX: MIN) has announced that the Red Hill Iron Joint Venture (RHIOJV) parties have made an unconditional Final Investment Decision (FID) to develop the RHIOJV iron ore assets as part of MinRes’ Ashburton Hub Development (Onslow Iron Project or Project) and have executed a Binding Project Development Term Sheet.
The RHIOJV is currently held 40% by MinRes and 60% by API Management Pty Ltd (APIM) on behalf of the parties to the Australia Premium Iron Joint Venture, Aquila Steel Pty Ltd (Aquila) and AMCI (IO) Pty Ltd (AMCI (IO)).
The project is located 150km east of Onslow in the West Pilbara region of Western Australia.
Onslow Iron will be one of the largest iron ore developments undertaken in Western Australia. Stage 1 of the Onslow Iron Project will consist of the RHIOJV tenements, which host Mineral Resources of 820Mt and 537Mt in Ore Reserves.
Stage 1 will target an annual capacity of 35Mtpa. Total capital expenditure of the Project is about $3 billion, representing an attractive capital intensity of US$65 per capacity tonne. RHIOJV FOB operating costs are expected to be $32.23/t (excluding royalties). In addition, MinRes will charge RHIOJV an infrastructure capital charge of $7.74/t.
Early works are underway as part of the development phase, with all equipment expected on site by June 2023 and first ore on ship targeted as early as December 2023.
MinRes will provide life-of-mine mining services to the project under crushing and mine-to-ship agreements. MinRes will deploy its innovative and proprietary suite of mining services assets including NextGen crushers, autonomous 320t jumbo road trains and 20,000t transhippers. MinRes will also own 100% of the off-site infrastructure including a private 150km haul road, port infrastructure, transhipper wharfs and Onslow resort accommodation.
Commenting on Onslow Iron project FID, Mineral Resources managing director Chris Ellison said:
“I’m delighted that our flagship Onslow Iron Project has reached this significant milestone. Achieving FID from all joint venture partners is a testimony to the Project’s credentials and demonstrates the high level of confidence all parties have in this project, which is set to redefine mining in Western Australia.
“Onslow Iron introduces a low-cost, long-life and low-risk operation to MinRes’ iron ore portfolio, along with the largest mining services contract in Australia. The successful delivery of the project is underpinned by MinRes’ mining services innovations, which make the project economics compelling through commodity price cycles and allow us to future-proof the business against low iron ore prices.
“MinRes has a strong track record of safely developing and operating iron ore projects in Western Australia.
“Importantly, we have designed Onslow Iron with a focus on minimising the environmental footprint including dust emissions from mine-to-port.”
“Project preparations are on track; early works have commenced and long-lead items have been ordered in line with the project schedule. We look forward to maintaining the momentum as we enter the construction phase, as we aim to meet our target of delivering first ore on ship by December 2023.
“We look forward to delivering solid returns for our joint venture partners and shareholders, creating thousands of jobs, injecting billions of dollars in the economy and working with the Traditional Owners, the Thalanyji people and the Robe River Kuruma people, pastoralists, and the wider community, to provide them with long-term benefits and economic opportunities.”
