Western Australian resources companies are helping to develop the South Australian iron ore sector as more projects in that state head towards production in the coming years.
Perth-based IMX Resources has emerged as one of the most progressive developers in South Australia through its Cairn Hill magnetite operation near Coober Pedy, which is now producing at a rate of 1.7 million tonnes a year.
IMX managing director Neil Meadows explained that Cairn Hill was a unique mine when compared with iron ore ventures in the west.
He said this was due to its direct shipping ore (DSO) nature, along with the appreciable amounts of copper and gold that existed in the deposit.
“It is DSO magnetite ore and it is not often that you will find magnetite mineralisation that is running about 53 per cent – normally the magnetite mines are about 15 to 30 per cent,” Mr Meadows said.
“If you count the copper and gold you could justify moving the ore in its entirety, which is what you want for a mine that only has a five-year life.”
Mr Meadows is aware of just one other producing mine, in the Philippines, which shares similar characteristics to Cairn Hill.
He said the iron ore sector in South Australia was considered a much more complex story than what had materialised in WA.
“I think there will be a few to several producers out of South Australia in the next five to 10 years that will be consistently sending several million tonnes from the state and creating a new industry,” he said. “It is also going to come down to which mines are economic, aren’t infrastructure constrained and are of a reasonable grade.”
Awareness of the region grew last year when WPG Resources sold the Peculiar Knob project to OneSteel for about $350 million as the steel maker continued to expand its mining business.
Peculiar Knob, which is targeting production by the fourth quarter of the 2012 financial year, shares similarities to Cairn Hill for its high-grade magnetite resource.
IMX also continues to explore another iron ore prospect of its own south-east of Cairn Hill, the Mt Woods iron ore project, where a resource approaching 1 billion tonnes has been identified.
WA’s IronClad Mining and Iron Road have also established a presence in South Australia with exploration projects.
IronClad last month started pre-production drilling at its Wilcherry Hill project ahead of build up to production of 10-12 million tonnes a year by 2015. Iron Road is focused on the Central Eyre Iron project.
