China’s Ansteel to jointly develop Karara Iron Ore Project with Aussie miner

Gindalbie Metals Ltd, an independent Australian iron ore company based in Perth, Western Australia said yesterday that it and China's Anshan Iron and Steel Group will jointly invest A$1.8 billion ($1.7 billion) for developing the Karara Iron Ore Project, and, expects avail of $1.2 billion in credit loans from China Development Bank by early next year.

Gindalbie is developing the Karara project through a 50:50 Joint Venture with China's second largest steel producer, AnSteel, which has a 36.28 per cent stake in Gindalbie.

In September 2007, Gindalbie had signed a wide-ranging Joint Venture Development Agreement followed by a decision to mine in November 2007.

The Karara Iron Ore Project is to develop magnetite deposit and produce both high grade magnetite concentrate on site and blast furnace quality pellets in north-eastern China.

Gindalbie and Ansteel are also working towards finalising an off-take agreement for Karara under which Ansteel has agreed to take 100 per cent of production to Ansteel's new 6.5Mtpa Bayuquan steel mill in China.

The mill's location adjacent to the Bayuquan Port at Yingkou Region will receive imported ore from Karara. Ansteel is already exploring opportunities to expand its steel producing capabilities at Bayuquan above 6.5Mtpa in expectation of additional feed from Karara.

Gindalbie has completed a Bankable Feasibility Study on Karara and is working towards an initial start-up phase of 2Mtpa of DSO quality hematite production in early 2011 and 8Mtpa of high grade magnetite concentrate commencing in mid-2011.

Karara's production is expected to be around 30 million tonnes/year and last for more than 30 years. Gindalbie and Ansteel have set an initial annual capacity target of 8 million tons of magnetite ore and 2 million tons hematite ore, which does not require treatment before export.