Glencore has secured a life-of-mine offtake agreement to receive iron ore from Macarthur Minerals’ Lake Giles project in the Yilgarn region of Western Australia.
Macarthur will supply around 4 million tonnes of ore a year to Glencore for the next 10 years, with an option to extend by a further 10 years.
The company previously stated that the initial 10-year period has an estimated value of around $US4 billion ($5.62 billion) in revenue, but later clarified that this estimate was based on inferred resources and did not include a statement of approval by a qualified person.
Macarthur executive chairman Cameron McCall said the commitment would ensure consistent long-term revenue for the company.
“Seeing a commitment of this size validates our resource and project and puts Macarthur in a position to maximise value to our shareholders,” McCall said.
“A project of this size will provide long term Western Australian job creation for a generation, especially in the local region of the proposed iron ore mines and for the port workforce in Esperance.”
Macarthur’s test work at the Moonshine magnetite project within Lake Giles has indicated that high value fines with as much as 68.5–69.1 per cent iron ore content is achievable at the project.
The Moonshine project hosts an inferred and indicated mineral resource estimate of 1.32 billion tonnes at an average of 30.1 per cent iron content.