MARDIE STATION, Australia: On a sprawling west Australian cattle station, the world’s largest trucks and excavators are working overtime to dig what will become one of the biggest holes on Earth.
Sino Iron, a joint venture between Hong Kong-based Citic Pacific and China’s state-owned Metallurgical Group Corporation, will be Australia’s largest magnetite iron ore mine, and its first major foray into processing the oxide.
China has been mining magnetite domestically for close to 100 years but Australia, blessed with other high-quality forms of ore deposits, saw little commercial benefit.
However, a five-fold increase over 10 years in iron ore’s spot price, driven by voracious Asian demand for the basic ingredient of steel, meant magnetite was now not only viable, but vital.
“This is basically China’s biggest single investment in a resources project in Australia,” said Sino Iron mine manager Tim Ryan.
“This will be the first large-scale magnetite operation in the world.” The renewed interest will translate into an open-cast pit 5.5 kilometres long, three kilometres wide and hundreds of metres deep — providing a glut of high-grade steel for China’s increasingly affluent consumers.
Despite being a lower-grade mineral when it comes out of the ground, and more costly to produce, magnetite is more stable and of higher purity than hematite — the main form of ore used in iron production — once crushed and processed, Ryan said.
“We like to say you build your Porsches out of magnetite and your Toyota out of hematite,” Ryan joked.
“Magnetite’s a better grade.” The top-end product, commonly used to build aircraft bodies and medical equipment, will find an enthusiastic market in the diversifying Chinese economy and its burgeoning middle class.
Mining giant BHP Billiton first explored the Sino Iron tenement in the early 1960s but wasn’t interested in magnetite, which is only 25 per cent pure when it comes out of the ground, said Ryan.
“It just wasn’t commercially viable to mine and process magnetite, which costs about 40 per cent more than hematite to produce,” Ryan said.
“It was a question of economies of scale.” So BHP and Rio Tinto staked their fortunes on the hematite-rich ranges of the Pilbara, where deposits such as Mount Tom Price and Mount Whaleback offered up ore of unrivalled purity.
“There was 65 (per cent pure) hematite literally cropping on the surface,” one Rio worker told AFP.
“It was like God’s gift to a prospector.” But most high-grade deposits in the Pilbara have been discovered and claimed, while China’s off-the-charts growth has left it struggling to find alternative sources of ore, said Ryan. — AFP