Magnetite Mines is increasing the planned production scale for its Razorback iron ore project in South Australia.
Due to growing demand for its high-grade product, the company’s current strategy of pursuing a small-scale, lower-capital expenditure development is being refocused in favour of a larger-scale, staged one that takes full advantage of the large resource base, available infrastructure and attractive mineral processing characteristics of the Braemar ores.
The expected benefits of this strategic shift include:
- enhanced project economics as a result of economies of scale’ and widening premiums for high-grade and DR-grade products, as demonstrated in recent expansion study outcomes
- increased attractiveness to potential iron and steel industry partners and customers, institutional investors, and project financiers
- alignment of project scale with large mineral resource estimates
- potential to re-estimate ore reserves as a direct result of expanded production scale
- improved ESG credentials associated with enhanced concentrate specifications and potential electrification of key infrastructure and equipment supported by larger-scale development
In advance of this strategic shift, the company has positioned itself to assure the development of the project, reinforcing board and management leadership with deep corporate, marketing and operational experience.
Magnetite Mines chief executive officer Tim Dobson said in raising its sights, the company was responding to direct evidence of rapidly-evolving market conditions associated with the decarbonisation requirements of the iron and steelmaking industry.
“The current Razorback ore reserve represents only 11 per cent of the company’s mineral resources, so this strategic shift to a larger initial production scale better aligns the project with the resource potential, while still taking advantage of the abundant existing infrastructure that will support a pragmatic, staged development agenda,” he said.
