Megan Anwyl -Magnet Magnetite Network - An Update on the Magnetite Sector in the Pilbara and the Global Outlook

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Megan Anwyl delivered the presentation at the 2014 Mining the Pilbara Conference.

The 2014 Mining the Pilbara Conference explored current projects and regulatory updates in the Pilbara region.

For more information about the event, please visit: http://www.informa.com.au/pilbaramining14

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Megan Anwyl -Magnet Magnetite Network - An Update on the Magnetite Sector in the Pilbara and the Global Outlook

  1. 1. An Update on the Magnetite Industry Mining the Pilbara
  2. 2. Current Members
  3. 3. WA Magnetite Projects
  4. 4. Projects - Economic Benefits
  5. 5. Magnetite Concentrate vs DSO Production Process
  6. 6. Magnetite Concentrate vs DSO Magnetite Concentrate vs DSO Production Process Magnetite Concentrate vs DSO Production Process Value-adding in Australia  Magnetite Concentrate Production Process - Fe3O4 Mine → Crush → Grind → Separate → Concentrate → Stockpile → Ship
  7. 7. Australian DSO Quality Steadily Declining 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 68.0% 70.0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 %Fe Magnetite Conc. Brazilian Fines Pilbara Fines FMG Fines Magnetite Concentrate is a premium product consistently > 68% Fe
  8. 8. Market preference for Magnetite • Main market is for Chinese steelmakers • Significant demand forecast to increase as Chinese domestic production tapers off • 70% of China mines produce less than 1mtpa • Significant Chinese political pressure around clean air, water, liveability of major cities • 900 million people to live in cities by 2030
  9. 9. Carbon Benefits • Producing magnetite (Fe3O4) concentrate is emissions intensive in Australia • When compared to use of DSO or hematite (Fe2O3) in steelmaking magnetite requires significantly less energy so produces less carbon emissions • 108kg less emissions per tonne in steel life cycle - from mine to steel
  10. 10. Global Carbon Savings Life-cycle analysis of magnetite shows that even though it is about seven times more energy intensive in Australia than hematite production, it has an overall global emissions reduction benefit when used in steelmaking. 0 500 1000 1500 2000 2500 3000 3500 Total CO2 saving in downstream processing by using magnetite ore in steelmaking Mine to ship (CO2 emission differencesbetween Magnetite versushematite in Australia) kgCO2e/tonneofmagnetiteproduct CO2 saving in steelmaking in China CO2 penalty due to beneficiation in Australia Net reduction of 108kg per tonne CO2 emissions from mine to steel Based on Sino Iron project emissions
  11. 11. Where to on Carbon? • December 2011 – Former government announces moderately emissions intensive assistance – 66% free permits for magnetite • Inequity created as no WA projects were yet in production so not factored in to allocative baseline used for free permit grants • MagNet supports repeal of carbon laws and has lodged ERF submissions • Favours a global ETS
  12. 12. Senate Lower House ALP Coalition Others Greens Old Parliament 73 71 (incl Slipper) 5 1 New Parliament 55 (-18) 90 (+18) 4 Katter Wilkie Palmer McGowan 1 Bandt PARTY Continuing New as at 1 July 2014 Total 76 Liberal/National Party 16 17 – WA:3 33 Australian Labor Party 13 12 – WA:1 25 Australian Greens 6 4 – WA:1 10 Palmer United Party 3 – WA:1 3 Democratic Labour Party 1 - 1 Australian Motoring Enthusiasts Party - 1 Vic 1 Family First - 1 SA 1 Liberal Democrats Party - 1 NSW 1 Nick Xenophon 1 SA 1
  13. 13. Where to on Carbon & MRRT? • MRRT & Carbon Law Repeal will occur • Direct Action doubtful – Review due in 2015 • Palmer/ ALP/ Greens ETS possible but seems unlikely • Magnetite unlikely to have liability / penalty payments • Special provisions for new projects • Renewable Energy Target to stay with modifications
  14. 14. Karara Opening 9 April, 2013
  15. 15. 15 Location Asia Iron Australian Project Locations 8 Bt 0.9 Bt 50 Mt Proposed Oakajee Port Development (200,000 DWT) 26 Mt 2,760 Ha Farming Property 2,760 Ha Farming Property 7,600 Ha Farming Properties Minga Well Magnetite
  16. 16. Extension Hill Project Update • Shareholder support confirmed • Chinese regulatory bodies and the City of Chongqing have affirmed their support of the Project and the goal to develop the Project as soon as possible. • Continuing completion of land access agreements; and • Continuing with debt finance arrangements Conditional Debt Funding received from Chinese policy bank Banker’s Due Diligence underway
  17. 17. Project Schedule
  18. 18. The Sino Iron project 18
  19. 19. CPM Ownership CITIC Pacific Mining (CPM) is owned by CITIC Pacific in Hong Kong: •CITIC Pacific – listed on HKSE - business focus is special steel, iron ore mining and real estate •CITIC Pacific is 58% owned by CITIC Group (Beijing) • First shipment in late 2013 • The Sino Iron project is China’s biggest mining investment in Australia.
  20. 20. Atlas Iron Ridley Magnetite Project • Only 75km from Port Hedland, adjacent to Pardoo • Reserve of 970Mt at 36%Fe, DTR grade of 68.3%Fe & 3.8% SiO2 • PFS complete. Mine life >20yrs, potential to 35yrs, 15Mtpa • $2.7Bn CAPEX • Project resource of 2 billion tonnes @ 36.5% Fe • Close proximity to the declared Goldsworthy Railway • Export alternatives include South West Creek, Anketell and trans-shipping
  21. 21. Atlas Iron Ridley Magnetite Project 22
  22. 22. Australia - China Business Council • Premier trade & investment group • More than 200 WA members • New National President Duncan Calder (KPMG - Perth) • WA President Adam Handley (Minter Ellison) • WA Resources Committee Chair Megan Anwyl
  23. 23. Questions

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