Name and Location
Karara iron-ore project, Australia.

Client
The project is a 50:50 joint venture between Gindalbie Metals and Ansteel.

Project Description
The project involves the development of an iron-ore mine in the midwest region of Western Australia. The Karara project tenements cover about 150 km² of highly prospective banded iron formation and include the 4-km-long Karara magnetite deposit and surrounding high-grade hematite ore deposits.

The project will be implemented in two stages to build a ten-million-ton-a-year iron-ore producer.

Stage 1 involves the mining of direct shipping hematite ore from Karara to deliver about eight-million tons a year of magnetite concentrate and up to three-million tons a year of hematite.

The logistics involve mining on site, followed by road/train haulage along the existing 85 km haul road to Morawa, where a rail siding will be built for loading ore onto rail wagons for cartage on the existing midwest railway, more than 200 km to the Geraldton port.

The second stage involves the mining and concentrating of the magnetite deposit at Karara.

The logistics of Stage 2 involve the mining of up to 20-million tons a year of raw magnetite ore, followed by a concentration on site at Karara to produce eight-million tons a year of magnetite concentrate, which will be transported by a 225 km slurry pipeline to the industrial estate at Narngulu, 6 km east of Geraldton.

The latest reserves and resources defined are expected to result in production of 30-million tons of iron-ore a year for a 35-year life-of-mine.

Value
The cost of the project is expected to increase by 30% to $2.63-billion, from an initial estimate of $1.65-billion, owing to industry-wide cost pressures.

The tailings management contract is valued at A$23-million a year.

Duration
The official opening of the Karara project will take place on  April 9, 2013.

Latest Developments
The commissioning of the Karara concentrator is being undertaken in stages, with the plant divided into a grid comprising nine areas. This grid covers all components of the process, including crushing and grinding, and various stages of magnetic separation, thickening, filtration and tailings.

To date, seven areas of the plant have been successfully commissioned, including, most recently, the primary and secondary crushing circuit, with no material issues encountered.

Only two remaining areas require commissioning – the final polishing circuit and a group of ancillary functions, including the tailings circuit.  

With the commissioning of the primary and secondary crushing circuit under way, the concentrator is operating at about 70% of its nameplate capacity of eight-million tons a year. The plant remains on track to achieve its full nameplate production rate by the end of April 2013.

Commissioning of the final polishing circuit is expected to continue until the end of the June 2013 quarter, but this will not impact on production rates. However, the final targeted concentrate specification of 68% iron will only be achieved once the final polishing circuit is operating at full capacity, which is expected at the end of June. Until that time, the concentrator will continue to produce magnetite concentrate, with a grade of about 63% iron, which achieves a competitive market price in line with its iron content.

To date the mine has shipped more than 2.7-million tons through the Karara export terminal, in Geraldton.

Key Contracts and Suppliers
Worley Parsons (project management services); Doric (design, supply and installation of Karara construction camp); Bateman and ProMet Engineers (front-end engineering and design); Polysius Australia (supply of four large ball mills and two high-pressure fine-grinding tower mills); Metso Corporation (secondary crushers); FLSmidth (primary crushers); China Development Bank and Bank of China (debt finance); Brierty (constructor of Karara access road and preferred mining contractor); Wearside Construction (iron-ore storage structural and mechanical works at Geraldton port); Aecom (detailed engineering design for Geraldton port); Amec Minproc (construction management services at Karara mine site); BIS Industries (tailings management) and Downer EDI (openpit mining contract).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Bateman, email enquiries@batemanengineering.com.au.
Brierty, tel +61 8 9459 2855, fax +61 8 9459 8202 or email info@brierty.com.au or investor@brierty.com.au.
FLSmidth head of investor relations and corporate communications Pernille Friis Andersen, tel +45 36 18 1887, fax +45 36 16 1922 or email pefa@flsmidth.com or corpir@flsmidth.com.
Gindalbie Metals, tel +61 8 9480 8700, fax +61 8 9480 8799 or email gbg@gindalbie.com.au.
Karara Mining, tel +61 8 6298 1888 or fax +61 8 6298 1099.
Metso Corporation investor relations manager Marja Mäkinen, tel +358 20 484 3211 or email marja.makinen@metso.com; or investor relations assistant Anne-Mari Ylikulppi, tel +358 20 484 3117 or email anne-mari.ylikulppi@metso.com.
Polysius Australia, tel +61 8 9494 7474, fax +61 8 9494 7499 or email au.polysius@thyssenkrupp.com.
ProMet Engineers, tel +61 8 9476 5700, fax +61 8 9476 5710 or email info@promet.com.au.
Worley Parsons investor relations, Erin Pattison, tel +61 2 8923 6761, fax +61 2 8923 6812 or email erin.pattison@worleyparsons.com.
BIS Industries, tel +61 2 9245 6333 or fax +61 2 9956 8821.
Downer EDI head of corporate affairs and investor relations Michael Sharp, tel +61 2 9813 8259, cell +61 439 470 145 or email michael.sharp@downergroup.com or corporate affairs manager Sonja Kukec, tel +61 3 9864 0880, cell +61 437 766 483 or email sonja.kukec@downeredi.com.