megan anwyl -magnet magnetite network - an update on the magnetite sector in the pilbara and the...
Post on 21-Oct-2014
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Megan Anwyl delivered the presentation at the 2014 Mining the Pilbara Conference. The 2014 Mining the Pilbara Conference explored current projects and regulatory updates in the Pilbara region. For more information about the event, please visit: http://www.informa.com.au/pilbaramining14TRANSCRIPT
An Update on the Magnetite Industry
Mining the Pilbara
Current Members
WA Magnetite Projects
Projects - Economic Benefits
Magnetite Concentrate vs DSO Production Process
Magnetite Concentrate vs DSO
Magnetite Concentrate vs DSO Production
Process
Magnetite Concentrate vs DSO Production
Process
Value-adding in Australia
Magnetite Concentrate Production Process - Fe3O4
Mine → Crush → Grind → Separate → Concentrate → Stockpile → Ship
Australian DSO Quality Steadily Declining
56.0%
58.0%
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
% F
e
Magnetite Conc.
Brazilian Fines
Pilbara Fines
FMG Fines
Magnetite Concentrate is a premium product consistently > 68% Fe
Market preference for Magnetite
• Main market is for Chinese steelmakers
• Significant demand forecast to increase as Chinese domestic production tapers off
• 70% of China mines produce less than 1mtpa
• Significant Chinese political pressure around clean air, water, liveability of major cities
• 900 million people to live in cities by 2030
Carbon Benefits
• Producing magnetite (Fe3O4) concentrate is emissions intensive in Australia
• When compared to use of DSO or hematite (Fe2O3) in steelmaking magnetite requires significantly less energy so produces less carbon emissions
• 108kg less emissions per tonne in steel life cycle - from mine to steel
Global Carbon Savings
Life-cycle analysis of magnetite shows that even though it is about seven times more
energy intensive in Australia than hematite production, it has an overall global emissions
reduction benefit when used in steelmaking.
0
500
1000
1500
2000
2500
3000
3500
Total CO2 saving in downstream processing by using magnetite ore in steelmaking Mine to ship (CO2 emission differences between Magnetite versus hematite in Australia)
kg C
O2
e/
ton
ne
of
mag
net
ite
pro
du
ct
CO2 saving in
steelmaking in
China
CO2 penalty due to
beneficiation in
Australia
Net
reduction
of 108kg
per tonne
CO2
emissions
from mine
to steel
Based on Sino Iron project emissions
Where to on Carbon?
• December 2011 – Former government announces moderately emissions intensive assistance – 66% free permits for magnetite
• Inequity created as no WA projects were yet in production so not factored in to allocative baseline used for free permit grants
• MagNet supports repeal of carbon laws and has lodged ERF submissions
• Favours a global ETS
Senate
Lower House ALP Coalition Others Greens
Old Parliament 73 71 (incl Slipper) 5 1
New Parliament 55 (-18) 90 (+18) 4
Katter Wilkie Palmer
McGowan
1
Bandt
PARTY Continuing New as at 1 July
2014 Total 76
Liberal/National Party 16 17 – WA:3 33
Australian Labor Party 13 12 – WA:1 25
Australian Greens 6 4 – WA:1 10
Palmer United Party 3 – WA:1 3
Democratic Labour Party 1 - 1
Australian Motoring Enthusiasts Party - 1 Vic 1
Family First - 1 SA 1
Liberal Democrats Party - 1 NSW 1
Nick Xenophon 1 SA 1
Where to on Carbon & MRRT?
• MRRT & Carbon Law Repeal will occur
• Direct Action doubtful – Review due in 2015
• Palmer/ ALP/ Greens ETS possible but seems unlikely
• Magnetite unlikely to have liability / penalty payments
• Special provisions for new projects
• Renewable Energy Target to stay with modifications
Karara Opening 9 April, 2013
15
Location
Asia Iron Australian Project Locations
8 Bt
0.9 Bt
50 Mt Proposed Oakajee
Port Development
(200,000 DWT)
26 Mt
2,760 Ha
Farming Property 2,760 Ha
Farming Property
7,600 Ha
Farming
Properties
Minga Well
Magnetite
Extension Hill Project Update
• Shareholder support confirmed
• Chinese regulatory bodies and the City of Chongqing
have affirmed their support of the Project and the goal to
develop the Project as soon as possible.
• Continuing completion of land access agreements; and
• Continuing with debt finance arrangements
Conditional Debt Funding received from Chinese
policy bank
Banker’s Due Diligence underway
Project Schedule
The Sino Iron project
18
CPM Ownership
CITIC Pacific Mining (CPM) is owned by CITIC Pacific
in Hong Kong:
•CITIC Pacific – listed on HKSE - business focus is
special steel, iron ore mining and real estate
•CITIC Pacific is 58% owned by CITIC Group
(Beijing)
• First shipment in late 2013
• The Sino Iron project is China’s biggest mining
investment in Australia.
Atlas Iron Ridley Magnetite Project
• Only 75km from Port Hedland, adjacent to Pardoo
• Reserve of 970Mt at 36%Fe, DTR grade of 68.3%Fe &
3.8% SiO2
• PFS complete. Mine life >20yrs, potential to 35yrs, 15Mtpa
• $2.7Bn CAPEX
• Project resource of 2 billion tonnes @ 36.5% Fe
• Close proximity to the declared Goldsworthy Railway
• Export alternatives include South West Creek, Anketell and
trans-shipping
Atlas Iron Ridley Magnetite Project
22
Australia - China Business Council
• Premier trade & investment group
• More than 200 WA members
• New National President Duncan Calder
(KPMG - Perth)
• WA President Adam Handley (Minter Ellison)
• WA Resources Committee Chair Megan
Anwyl
Questions