On the road for a massive new iron ore mine

Iron Road’s Central Eyre Iron project in South Australia is set to provide the state with a much needed magnetite boost.

The South Australian mining industry has not had the smoothest run of late with a spate of mine closures and the deferral of major projects sending shockwaves through the industry.

But a mid-level explorer with a massive iron ore deposit in the Eyre Peninsula is turning heads as the scope of its proposed project, and what it can offer the SA economy becomes apparent.

If all goes to plan, Iron Road’s Central Eyre Iron Project could be generating revenue worth more than SA’s wheat, beer or wine sales combined, a massive $3.3 billion.

The company recently released its $US100 million definitive feasibility study and say the mine has a 25-year life span and the potential to produce 21.5 million tonnes of iron ore a year.

Iron Road said the project will require 2000 workers for its construction and 700 to run the mine.

The development will include a 6km long, 600m deep open cut mine plus associated processing infrastructure, a 148 kilometre railway, and a deep water port with a 70 million tonne capacity.

Designated a major development by South Australia’s Labor government, the mine now needs partners to help with its $4 billion price tag, but with a high quality product and solid credentials, the company is confident it can get the project up and running.

High Quality Product

Environmental regulations have tightened in Asian markets, particularly China, in response to pollution and energy consumption concerns and this drive for higher quality material is expected to bode well for CEIP, the company’s managing director Andrew Stocks said.

While most Australian magnetite projects produce very fine grained products more suitable for the pellet feed market, Iron Road has chosen the larger north Asian sinter feed market as the main target for the relatively coarse CEIP concentrate.

“And this is key to understanding why this project is what it is,” Stocks explained.

With a 67 per cent iron ore concentrate that has low phosphorous, sulphur, silica and alumina content, a price premium of $6 per tonne will be placed on the ore.

Moreover, the move also improves the project’s cost profile and acts to minimise risk and price volatility.

“The finer you go the more power you use,” Stocks explained.  

“Grinding at 130 micron makes a huge difference to power consumption and costs associated with the plant both from a capital and equipment side and operating side.

“It also makes a huge difference in the handling of materials.”

Stocks said exporting a coarser but higher quality concentrate will help to keep costs down and expose the product to a bigger market.

“We spent a lot of time looking at our market and a lot of time talking to steel mills to see if what we’re proposing really is desirable to a steel maker.

“We want to produce something that people are really going to want.”

In order to prove the product could be sintered Iron Road has undertaken extensive commercial scale test work that indicates that for typical Chinese sinter blends, CEIP concentrate could be successfully substituted for up to 30 per cent of Pilbara or Brazilian fines.

It also showed the CEIP concentrate would be substituted for high grade domestic Chinese concentrate in the sintering and pelletising process.

“In every case we could substitute the other iron ores on a one for one basis, that is take a tonne of Pilbara ore out and put a tonne of Central Eyre in,” Stocks explained.

In every case there was a slight reduction in fuel and a corresponding increase in productivity while fuel use also dropped when replacing Pilbara ore.

 “So we may end up displacing some Pilbara ore with this,” Stocks said.

And although iron ore prices have taken a tumble of late, Stocks said the project’s costing are based on a $112 a tonne spot price.

He also said predictions of huge falls and oversupply coming on to the market are overstated, and are based on the assumption that all iron ore will come onto the market at the same time.

 “If we see someone saying iron ore will be $80 a tonne, I guarantee he believes every ounce of iron ore will becoming on as fast as the proponents say it will come on,” Stocks said.

“It will not come on as fast as people are saying”.

With half the world’s iron ore supply coming from three companies, and Australia producing half the globe’s iron ore needs, Stocks said customers are looking for more competitiveness in the market.

“Customers want diversity; they don't like that because if these guys start acting together there's a monopoly that will keep the price artificially high.”


In developing the project, Stocks said it is important to implement technologies already being used at other sites but to make them work at CEIP.

“This is not a proving ground for some engineer that’s got a hobby,” he said.

“We are taking what people are already doing and be smarter about it.”

To this end, upgrading tried and tested processes was a key feature of the DFS and will work to keep both construction and operating costs down.

Stand outs of this approach include using modularisation, in pit conveying and crushing, and a unique processing plant.

All the major processing infrastructure at the site will be built and commissioned as modules overseas and shipped to the site.

Not only will this help to cut costs, it will also prove a de-risking tool for the project.

Project manager Aaron Deans explained modularisation also proved a good fit for the area logistically.

“We’re very fortunate here,” he said.

“We don’t have the bridges, and we’ve got two power lines we need to address but we’re already in discussions with the authorities to jack those up to give us the clearance we need to come underneath.”

This means transport restrictions in the places like the Pilbara don’t apply to CEIP which will be able to import ship loads weighing more than 2000t at heights of up to 40 metres.

Deans conceded that while modularisation did help to keep construction dollars down, the main advantage was that it cut risks.

With the processing plant being commissioned at the yard where it is built, any issues can be fixed there instead of on the CEIP site.

“We’re de-risking the schedule quite significantly,” Deans said.

“If you think in terms of normal construction activities, you do your earthworks program, your concrete, bring your mechanical guys on, start standing steel, and then load your mechanical equipment in. Then you power on and commission it.

“We can actually be doing all those mechanical works, fitting it out electrically, and be commissioning the plant while we’re still running an earthworks program and installing concrete.”

Instead of relying on one plant, three processing plants will be built next to each other, creating flexibility in the case of breakdowns, maintenance issues, or realigns.

Being built vertically also means gravity is utilised, eliminating the need for an extra 70 to 80 pumps.

Further efficiencies at the site will be found with the use of in pit crushing and conveying, which is set to slash diesel costs.

“We’re being smart in the way processing works in order to cut fuel and operating costs,” Stocks said.

Further to this, the mine will decrease its footprint by combining waste rock and tailings in a single area.

Belt filters will receive coarse and fine tailings from the process facility and reduce the retained moisture content to 10 per cent. The filtered tailings, now a paste consistency, is then delivered together with waste rock to the designated storage area by conveyor and dispersed from mobile stackers.

 “The innovation at the project are around how things have been packaged and put together for efficient outcomes,” Deans explained.

Rail and Port

As part of the mine’s development, ore will be transported by a newly built 148km railway line to a port earmarked for Cape Hardy on the Spencer Gulf.

The hope is that the rail line, coupled with what is set to be the only capsize facility in the peninsula, will work together open up the centre of Australia.

The port will have an initial capacity of 70 million tonnes per annum, but this can be ramped up and with the company already signing a memorandum of understanding with a large international commodities trader for third party access.

Stocks said the option of connecting it’s railway with the Australian Rail Network opens up the port to huge area of the country.

“We say it’s an investment enabler and it is,” he said.

“We get people all the time that come to see us about some business case they’ve got that just doesn’t quite get over the hurdles.”

This could also include other resource companies who are struggling to get their minerals to port, or who have to undertake logistically challenging processes to do so.

Construction of the port is simple with pylons used to support the modularised parts of the deck, which come complete with all the pipework and just need bolting into place.

Stocks said the port is expandable, with a modularised off-loading facility meaning the company can receive consumables and also has the ability to receive and send containers.

Stocks said he is not concerned with the amount of proposed ports being “bandied about “in the area.

With no dredging required, and not being at the mercy of bad weather, Stocks said Iron Road’s logistical plans had scope and scale.

“You need scale to build these things – and we have the scale to build it,” he said.

What’s next?

Working with the community is a big part of the mine’s profile, and has been helped along with the employment of Wudinna shire ex-mayor and local farmer Tim Scholz as the community engagement adviser

“The company has always said they want to be part of the community,” Scholz explained.

Iron Road has had a big presence in the community, with involvement in a lot of the Wudinna’s sporting clubs, assisting hospitals with fundraising, and heavy involvement with the school.

Scholz said the community is mostly supportive of the mine and the economic value it can bring, however sticking points include the six landowners who will be displace by the mine itself, and 42 affected along the railway route.

““People are fearful they will be affected by noise, dust, pollution and interference in their day-to-day activity,” Scholz said.

However he said the majority of people he spoke to recognise the project could provide significant economic opportunity.

“New economic activity that can inject new dollars and create new opportunity means that instead of our kids just getting to after the school age and leaving, there’ a chance some of those can come back,” he said.

Talks to fund the project and find partners and take-off agreements will get underway now that the DFS is complete.

These talks are centre around countries like China, Japan or South Korea, and may seem like a big ask in current down-turn in greenfield projects.

However, with a bullish and straight talking Stocks at the helm, you get the feeling this project will indeed stick to its word and get ore to port, a job 10 long years in the making.

Australian Mining was a guest of Iron Road.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.