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Iron Road reduces opex at Central Eyre

Iron Road reduces opex at Central Eyre

Photo by Bloomberg

20th April 2016

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed developer Iron Road has reduced the operating cost expectations of its planned Central Eyre iron project, in South Australia, on the back of market repricing.

An October optimisation study resulted in a reduction in the expected life-of-mine (LoM) free-on-board (FOB) costs from the $44.33/t estimated in the 2013 definitive feasibility study (DFS), to $37.72/t, while total capital expenditure (capex) increased from the 2013 estimate of $3.98-billion to $4.01-billion.

However, Iron Road said on Wednesday that the LoM average FOB price had been reduced to $35.38/t as the market repriced operating consumables, including diesel, explosives, process plant grinding media and mill liners, which comprise some 33% of FOB operating costs.

The junior developer was targeting a $600-million reduction in capex to $3.4-billion.

The Central Eyre project is expected to produce 24-million tonnes a year over a mine life of 25 years.

Meanwhile, Iron Road MD Andrew Stocks told a resource conference on Wednesday that the company would call for third-party expressions of interest for the proposed deep-water port that would accompany the development of the Central Eyre project.

“The mine has a current proposed life-of-mine of around 30 years but its broader infrastructure includes a 148 km heavy haul railway and the proposed Cape Hardy deep-water port north-east of Tumby Bay. This site requires no dredging and will offer a South Australia-first shiploader capacity of 70-million tonnes an annum,” Stocks said.

“We are sincere in wanting third-party users to access this key port infrastructure for both import and export activity.

“There is substantial capacity in the port design both in surrounding land area and wharfside facilities and it is in all of our interests that these facilities be fully engaged as much as possible to enhance operating performance.”

Iron Road recently signed a partnering agreement with China Railway Group covering a 12-month project commercialisation programme aimed at finalising bankable construction contracts, iron concentrate sales contracts, equity and debt financing procurement.

Edited by Creamer Media Reporter

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