Download - Megan Anwyl, MagNet: Forecasting the Future of Magnetite Projects in WA: Some Political Challenges
Predicting the Future of Politics & the Magnetite Industry
26 November 2013
Members
Economic Benefits
WA Magnetite Projects
Magnetite Concentrate vs DSO Production Process
Value-adding in Australia
Magnetite Concentrate Production Process - Fe3O4
Mine → Crush → Grind → Separate → Concentrate → Stockpile → Ship
6
Australian DSO Quality Steadily Declining
56.0%
58.0%
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
% F
e
Magnetite Conc.
Brazilian Fines
Pilbara Fines
FMG Fines
Magnetite Concentrate is a premium product consistently > 68% Fe
Disclaimer – Politics Hard to Predict
Senate
Lower House ALP Coalition Others Greens
Old Parliament 73 71 (incl Slipper) 5 1
New Parliament 55 (-18) 90 (+18) 4
Katter Wilkie Palmer
McGowan
1
Bandt
Senate Party Continuing New as at 1 July Total
Liberal/National Party 16 17 33
Australian Labor Party 13 13 25
Australian Greens 6 4 10
Democratic Labour
Party 1 0 1
Others 0 7 7
Global Carbon Savings
Life-cycle analysis of magnetite shows that even though it is about seven times more
energy intensive in Australia than hematite production, it has an overall global emissions reduction benefit when used in steelmaking.
0
500
1000
1500
2000
2500
3000
3500
Total CO2 saving in downstream processing by using magnetite ore in steelmaking Mine to ship (CO2 emission differences between Magnetite versus hematite in Australia)
kg C
O2
e/ t
on
ne
of
mag
net
ite
pro
du
ct
CO2 saving in
steelmaking in
China
CO2 penalty due to
beneficiation in
Australia
Net
reduction
of 108kg
per tonne
CO2
emissions
from mine
to steel
Based on Sino Iron project emissions
Where to on Carbon ? • December 2011 – Former Minister Combet announces
moderately emissions intensive assistance – free permits
• Baselines set on 4Mtpa production in total – Arrium and
Grange Resources – different emissions to WA projects
• Inequity created as no WA projects were yet in production
so not factored in to allocative baseline used for free permit
grants
• Two WA projects start this year with 40Mtpa combined
Stage One production- higher intensity emissions
• Other comparable industries were granted additional
special assistance such as LNG, steel.
Where to on Carbon ?
• Emissions Reduction Fund Submission
• MagNet supports global mandated emissions
reduction scheme
• Light touch baselines
• “Compliance make good provisions”
• Government to review global progress of
emissions reduction schemes in 2015
Federal Parliament
Release of Green Paper December 2013
Release of White Paper and Draft legislation Early 2014
Commencement of Emissions Reduction Fund 1 July 2014
New Senate starts 1 July 2014
• Current Senate hostile
• Greens and ALP don’t agree on strategy
• Carbon Repeal to start 1 July 2014
Karara Opening 9 April, 2013
Karara Iron Ore Project
• Gindalbie Metals Limited – AnSteel Joint Venture known as Karara
Mining sent its first shipment of magnetite concentrate from the Karara
Project to China on 1 January 2013.
• Commissioning of the Karara Concentrator continues to progress well
but some challenges.
• The Project is on track to be cash flow positive in March quarter 2014 –
target to reach Phase One production capability of 8Mtpa.
• Significant new power, port and rail infrastructure built - $3billion plus in
the Mid West region.
• A royalty rebate of 50% will occur for one year from the date of reaching
nameplate production.
• For technical update see www.gindalbie.com.au
Extension Hill Magnetite Project Configuration
• Greenfields development
– >$110 M spent to date
• 280 km SE of Geraldton
– High biodiversity value
• Multi-billion tonne resource
– 1.6 Bt JORC Inferred
– > 8 Bt potential
– Highest grade in WA
• GPA then Oakajee to +/- 50 Mtpa
Extension Hill Magnetite Project Configuration
• Approved Stage 1 project plan
• $2.9 billion Capex
– 10 Mtpa
• Open Pit Mine
• Ore Processing Plant, Concentrator, Site Infrastructure and Services
• Slurry, Gas and Water Supply Pipelines;
• Filter plant, Product storage and Shiploading at Geraldton
• 330 kV Power Transmission Line
The Sino Iron project
17
Ownership
CITIC Pacific Mining (CPM) is owned by CITIC Pacific in Hong Kong:
• CITIC Pacific – listed on HKSE - business focus is special steel, iron
ore mining and real estate
• CITIC Pacific is 58% owned by CITIC Group (Beijing)
• CITIC Pacific Mining recently announced that Production Line 1 of its
planned 6 Production Lines has moved from Commissioning into a
Production Phase, with Production Line 2 currently in Load
Commissioning. See www.citicpacific.com
• First shipment in 2014.
• The Sino Iron project is China’s biggest mining investment in Australia.
Australia - China Business Council
• Premier trade & investment group
• More than 200 WA members
• National AGM held 6 November
• New Perth based National President Duncan
Calder (KPMG)
• WA President Adam Handley (Minter Ellison)
http://www.acbc.com.au/
With a collaborative approach , the Magnetite Network and its member
companies have the potential to generate massive infrastructure,
employment and regional development opportunities, while delivering
a net global carbon reduction per tonne of steel produced
The Future