Fledgling WA mining company Flinders Mines has come out fighting after attempts to convince iron ore giants BHP and Fortescue to allow access to their rail lines fell on deaf ears.
A new proposal to build a $3 billion dollar rail and port access corridor is getting the attention of the Australian Stock Exchange.
Rutila and Flinders Mines have ambitious plans to construct a new iron ore port and rail line at the heart of Australia’s iron ore industry. This is the brainchild of former Lynas boss Nick Curtis.
Shares in Mr Curtis’ iron ore venture Rutila Resources rocketed 30 per cent last Thursday after it announced the port and rail joint venture with ASX-listed Flinders Mines and private New Zealand company Todd Minerals.
The Australian Stock Exchange listed mining company says a new agreement to access a proposed rail and port system in the Pilbara will help progress its iron ore mining operations near Tom Price.
$3.3 billion mining project
The estimated $3.3 billion project would see a new port built halfway between Port Hedland and Rio Tinto’s port at Cape Lambert. This would be close to where Rutila also has plans to develop a magnetite mine. Connecting the port to the mine would be a 200-kilometre railway.
Flinders will use Balla Balla joint venture’s planned network to ship its ore by 2017.
Failed negotiations to access existing rail lines owned by BHP Billiton and Fortescue Metals Group have spurred the mining company into action to create a new solution.
“create a new logistics solution”
Previously Flinders had come to an arrangement with fellow iron ore miner Brockman Mining to work together to create a new logistics solution to move iron ore from their mines to the port. Flinders’ executive director Robert Kennedy, said he had not spoken to Brockman about this new deal, preferring to focus on the point that this new alternative option represents a viable solution.
“most of it is on flat land so that’s cheaper”
“The ideal situation would be to use an existing rail but there was no opportunity for us to utilise those rails so we had to find another solution,” he said. “We don’t have to have the huge port costs that are up there at Port Hedland – and with the railway….most of it is on flat land so that’s cheaper.”
20 million tonnes of annual port capacity to Flinders
Rutila expects to require up to 10 million tonnes of port capacity, and has offered an initial 20 million tonnes of annual port capacity to Flinders, with potential for further expansions. Rutila already has some approvals for environmental works close to the port, but the larger joint venture would require numerous more approvals, particularly with regard to the rail line.
In terms of getting the ore onto ships, barging, or trans-shipping, has been successfully used by the Clive Palmer’s Sino Iron project in the Pilbara. This could also be the solution for Rutila and Flinders. This type of technology is simple and the operating costs are not a great deal higher than a deep-water port load-out facility.
Junior mining companies form partnerships in the Pilbara
BC Iron Limited established a 75/25 joint venture with Fortescue Metals Group in 2009 known as the Nullagine Iron Ore Project, which is located directly north of Fortescue`s Chichester mining operations.BC Iron agreed to haul iron ore by road from its mine to Fortescue`s Ore Processing Facility at Christmas Creek. BC Iron then contracted Fortescue`s subsidiary, The Pilbara Infrastructure Company, to provide rail services from Christmas Creek and port services via Port Hedland on a fixed price per tonne basis.