Mount Gibson Iron yesterday announced it would restart the construction of its Extension Hill iron ore project, located 260 km south-east of Geraldton, Western Australia.
The company hopes to complete the construction within the next 15 months and the project will cost $80 million to develop, the miner said in a statement.
Mount Gibson has secured ore sales contracts with Shougang Concord International Enterprises and APAC Resources for the lifespan of the mine.
The company said it had also obtained track access and rail haulage agreements, as well as specialised rail wagons, to cater for production of at least three million tonnes per annum.
A $90 million upgrade of the existing line between Geraldton and Perenjori will also be completed by Westnet Rail by June 2011.
Mount Gibson managing director Luke Tonkin called the project a substantial investment in the mid-west region.
“It will enhance infrastructure, create employment and create opportunities for local communities,” he said.
“The recommencement also signals the strength of Mount Gibson’s balance sheet resulting from necessary capital raisings early in 2009, the very strong performance of our operations and a cautious optimism regarding iron ore demand.”