New Pilbara rail link wins environmental backing

OREANDA-NEWS. A new 205km rail line connecting a proposed 25mn t/yr Pilbara iron ore project with Balla Balla port has won conditional approval from the Western Australia Environmental Protection Authority (EPA).

The A\\\$1.33bn (\\\$1.02bn) Balla Balla port will have up to 45mn t/yr of iron ore export capacity. It will be managed by Australian mining firm Rutila Resources and New Zealand investment and industrial group Todd Group. Australian iron ore group Flinders Mines will operate the Pilbara iron ore project.

The Balla Balla infrastructure includes a 2.9km jetty where iron ore will be loaded to transshipment vessels to transfer to Capesize vessels anchored offshore. No dredging is required for the new port and no deepwater infrastructure will be built, Rutila said.

Flinders' Pilbara iron ore project will be the foundation customer for Balla Balla, which is to the west of Port Hedland that has about 495mn t/yr of iron ore export capacity and potential capacity of up to 600mn t/yr. The 130mn t/yr Cape Lambert port operated by the UK-Australian mining firm Rio Tinto aims to expand by a further 50mn t/yr as part of its plan to reach iron ore production capacity of 360mn t/yr.

Flinders' Pilbara project has resources of about 250mn t with a mined product of 58.5pc Fe and has a planned initial mine life of 10 years.

The combined project production and supply costs equate to a landed price of A\\\$46.50/t with mining accounting for A\\\$15/t, iron ore processing A\\\$5/t, rail and haulage A\\\$2.50/t, port handling A\\\$5/t, royalties A\\\$9/t and shipping A\\\$10/t, Rutila said at the end of last year.

Rutila and Flinders signed an alliance agreement on the mine and port plan in February 2014. A final investment decision is planned for the end of 2015.

The EPA also recommended the approval of the 2mn-4mn t/yr Extension iron ore mining proposal from Australian Aboriginal Mining Corporation. The Extension project is about 70km northwest of Newman in the Pilbara.