Iron Road $4.5bn magnetite project given green light, to create thousands of jobs

Jay Weatherill, Premier of South Australia; Tom Koutsantonis, Minister for Minerals and Energy, and Andrew Stocks, managing director of Iron Road

Iron Road has received two key approvals from the South Australian Government that will help clear the way for development of the $4.5 billion Central Eyre iron ore project (CEIP).

The SA Government granted the mining lease and development approval for the project, which would become the largest magnetite mine in Australia if developed, estimated to produce 21.5 million tonnes per annum (Mtpa).

CEIP will include the construction of a 145km rail link and deep water port at Cape Hardy. The port will also be used to export other goods for the region, according to the SA Government.

The project is set to create nearly 2000 jobs during construction and 700 jobs during operations over the 25-year life of mine.

Securing the government approvals is the latest milestone for Iron Road as it moves the project towards financing and construction.

In September 2016, the rail and port components of the project were declared a priority project by Infrastructure Australia. Last month, three Chinese banks indicated their interest in helping finance the project.

The company’s progress at Central Eyre has also been backed by its strategic partner, China Railway Group.

Iron Road managing director Andrew Stocks said he was delighted to receive the two primary South Australian approvals for the Central Eyre project.

“The CEIP will employ approximately 1950 people during construction and 700 during operations, all located on the Eyre Peninsula, in addition to the workforce required in the Adelaide head office,” Stocks said.

“The approvals we have received are a direct recognition by the South Australian Government of these and other significant direct benefits for the state.

“We are now looking forward to the next stage of our development journey which will include further engagement with stakeholders, preparing our secondary approval applications, reaching a final investment decision together with CREC and ultimately achieving financial close.”

The only remaining primary government approval for the project is under the Commonwealth environmental legislation, with a decision expected to be announced within weeks, according to Iron Road.

The Adelaide-based company is seeking to secure the remaining financing for the project by December 2017.

CREC senior representative for the project, Cai Zemin, said the latest milestone demonstrated “the strong joint commitment of CREC, Iron Road and the South Australian Government to the construction and operation of Australia’s next major mining and infrastructure project.”

He added the project was “one that will have a significant impact on the strength of the mining sector in the state.”

Approvals for the mine, rail line, port and associated infrastructure were based on assessment of an environmental impact statement, a mining lease proposal, 105 submissions from the community and other stakeholders and the company’s response to the issues these raised.

The project has the potential to increase production in line with the SA Government’s magnetite strategy aim of exporting 50 million tonnes a year by 2020.

“We are lucky enough in this state to have vast reserves of magnetite, which is a cleaner form of iron that produces lower CO2 emissions when used to produce steel,” SA Premier Jay Weatherill said.

“If Iron Road meet the conditions of their approval this project will create thousands of jobs and have a significant, lasting impact on our economy.

“Connecting the Eyre Peninsula to the world’s markets through a modern rail link and deep-water port that can be used by other businesses will also enable this important region of our state to grow.”

The proposed deep-water port and heavy haulage railway will be a first for South Australia and are expected to provide a profound improvement on the Eyre Peninsula’s existing infrastructure base.