PERTH (miningweekly.com) – ASX-listed CZR Resources, Strike Resources and CSL Australia have inked a memorandum of understanding (MoU) to form a consortium to jointly develop an iron-ore export facility at the Port of Ashburton, in Onslow.

The companies will jointly undertake preliminary designs for a five-million tonne a year integrated export facility, including road train unloading, storage shed, transhipment vessel loader and ancillary fixed and mobile infrastructure.

The consortium was formed with the objective of working with relevant authorities to obtain required approvals for the establishment of infrastructure at the Port of Ashburton to create an efficient low cost and environmentally sustainable bulk iron-ore export facility for up to five-million tonnes of iron ore a year.

Strike, as an existing producer of iron-ore from its Paulsens East iron ore project, and CZR as a future iron-ore producer from the development of its Robe Mesa iron ore and Ashburton magnetite projects, will use the Port of Ashburton West Quay Facility for the export of iron-ore from their existing and proposed iron mines respectively.

CSL currently provides transhipment services for iron-ore exports from Cape Preston in Western Australia and Whyalla in South Australia, and has joined the consortium as a part-owner of the Port of Ashburton West Quay Facility to provide transhipment services to Strike and CZR.

CZR told shareholders on Friday that the export facility would be an important step for the company in securing a low cost and sustainable export solution in close proximity to its Robe Mesa iron-ore project, which hosts a mineral resource of some 42.5-million tonnes at 56% iron.

The export facility will be incorporated into a definitive feasibility study and mine production scheduling, which is currently under way.

“The three-way partnership has the potential to be a highly successful means of establishing a new export facility at the Port of Ashburton. By joining forces, we increase our ability to secure necessary approvals and funding as well as significantly reducing capital and operating costs for each partner,” said CZR MD Stefan Murphy.

“The export facility would unlock substantial value for CZR, creating many jobs and generating substantial state and Native Title revenue in the process.”

Strike told its own shareholders that the Port of Ashburton was significantly closer to its Paulsens East operation, only 235-km away, as opposed to the 650 km from the Utah Point in Port Hedland.

Strike has already received a Works Approval under the Environmental Protection Act from the West Australian Department of Water and Environmental Regulation for the export of up to 1.8-million tonnes a year of iron-ore from the Port of Ashburton. Strike’s separate Works Approval application for offshore marine operations, relating to an offshore anchorage area for the bulk loading of iron-ore from a transhipment vessel to Ocean Going Vessels, is progressing well and is expected to be issued shortly.

Strike has undertaken Paulsens East Stage 1 production, involving the mining of surface detrital material and crushing, screening and ore sorter processing to produce Paulsens East lump direct shipping iron-ore (DSO) with road train haulage to the Utah Point multi-user bulk handling facility for export.

The company is undertaking Paulsens East Stage 2 development, which will involve conventional open pit mining of the Paulsens East hematite ridge, ramping up to an annualised production rate of up to some 1.8-million tonnes a year, with road train haulage to and export through the Port of Ashburton.

The company recently took the decision to pause further shipments from Utah Point given current market conditions, in particular, taking into account the low benchmark iron-ore price relative to prices earlier in the year, together with rising input costs adversely impacting operating margins. The company told shareholders that it would continue to review market conditions and in particular the forward benchmark pricing for iron ore and will make further shipments to Utah Point if iron-ore pricing and market conditions met the company’s internal thresholds.