Iron Road’s estimated capital costs for the Central Eyre iron project (CEIP) in South Australia have been reduced by nearly $US300 million ($391 million) to $US3.7 billion ($4.8 billion) as the project moves closer to development.
The project’s initial estimated capex was $US4 billion ($5.2 billion), however this was reduced due to Iron Road’s partner, China Railway Group (CREC) providing around US$295 million ($384 million) of capital savings as part of the joint project commercialisation programme.
According to Iron Road, the cost reductions mainly came through CREC’s in-house procurement systems and the leverage associated with key capital items and equipment required.
Earlier this year the South Australian Government granted the mining lease and development approval for the project, which, if developed, would become the largest magnetite mine in Australia.
The CEIP is expected to produce 21.5 million tonnes per annum (mtpa) of magnetite, and will include the construction of a 145km rail link and deep water port at Cape Hardy.
Thiess-RWE has also been selected to conduct a final, short mine plan review of the project which is expected to provide additional mine establishment efficiencies around the planned use of in-pit crushing and conveying.
The review’s findings are set to be delivered in August 2017.