21 June 2011 - MEP SA Transport Infrastructure Presentation
Transport Infrastructure challenges for bulk iron from the Braemar Iron Formation. The viewpoint of the Braemar Iron Alliance SA Transport Infrastructure Conference, Adelaide 21 June 2011 Andrew Woskett, Spokesman for the Braemar Iron Alliance Managing Director, Minotaur Exploration Ltd (ASX: MEP)
Cautionary StatementsThis presentation has been prepared by the management of Minotaur Exploration Limited (MEP) on behalf of the Braemar IronAlliance, an unincorporated body, for the general benefit of analysts and industry and does not constitute specific advice to anyparticular party or persons. Information herein is based on publicly available information, internally developed data and other sources.Where an opinion, projection or forward looking statement is expressed in this presentation, it is based on the assumptions andlimitations mentioned herein and is an expression of present opinion only. No warranties or representations are made or implied as toorigin, validity, accuracy, completeness, currency or reliability of the information. MEP and Alliance members specifically disclaim andexclude all liability (to the extent permitted by law) for losses, claims, damages, demands, costs and expenses of whatever naturearising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person onany of it. Where MEP or the Alliance expresses or implies an expectation or belief as to the success of future exploration and theeconomic viability of future project evaluations, such expectation or belief is expressed in good faith and is believed to have areasonable basis. However, such projected outcomes are subject to risks, uncertainties and other factors which could cause actualresults to differ materially from projected future results. Such risks include, but are not limited to, exploration success, metal pricevolatility, changes to current mineral resource estimates or targets, changes to assumptions for capital and operating costs as well aspolitical and operational risks and government regulatory outcomes. MEP and the Alliance disclaim any obligation to advise anyperson if it or they become aware of any inaccuracy in or omission from any forecast or to update such forecast. The following presentation is a visualisation of possible infrastructure solutions to support potential future iron ore mine developments. Locations nominated for the provision of infrastructure facilities are for illustration purposes only and should not be considered viable technical, economic, environmental, social or State solutions for any future requirements
Braemar Ironstones: The infrastructure challenge1. The Braemar Iron Alliance: members and objectives2. The Braemar Iron Formation: where, what and why it is Australia’s next big Iron province3. Mining development scenarios4. Transport Infrastructure challenges: Rail haulage of concentrates and lump ore Concentrate Slurry transfer Port capacity Freight cost penalty
The Braemar Iron AllianceThe Braemar Iron Alliance comprises: The Braemar Iron Alliance intends to: Bonython Metals Group (private) Define and articulate the demand case to Carpentaria Exploration (ASX: CAP) federal, state & local governments and Havilah Resources (ASX: HAV) infrastructure investors for coordinated transport Minotaur Exploration (ASX: MEP) and common user infrastructure to suit the Royal Resources (ASX: RRL) needs of the iron ore mining industry along the Sinosteel PepinNini JV (SPCM) Braemar Iron Formation
Braemar Ironstones: Australia’s next big Fe provinceThis presentation is based on a range of views held and assumptions made by members of the Braemar Iron Alliance, none of which are yet supported by definitive feasibility studies into potential development of mineral resources.The integrated, multi-user infrastructure facilities envisaged herein are hypothetical in nature and scope and there can be no level of certainty that this or any concept may eventuateThe term "Exploration Target” used herein should not be misconstrued as an estimate of Mineral Resources and Reserves as defined by the JORC Code (2004), and the term has not been used in that context. It is uncertain if further exploration will result in the determination of a Mineral Resource. Refer Cl 18 of the JORC Code (2004).
Braemar Ironstones: who is involved? Iron mineralisation stretches for over 200km from SW of Broken Hill to Peterborough in SA The formation straddles the heavy duty E-W rail link to Port Pirie on Upper Spencer Gulf
Braemar Ironstones: the potential mining scale Alliance members foresee potential for up to 50 billion tonnes of mineable magnetite ore to be defined through exploration over the next decade (‘Exploration Target’) with scope for say 5 pits each mining 50 million tonnes of ore p.a. and beneficiating around 10Mtpa of concentrate each for total annualised output of ~50Mtpa of blast furnace quality magnetite concentrates grading 65% - 70% Fe and a foreseeable 100 year life of mining across the Braemar ironstones
Braemar Ironstones: Transporting Concentrates & lump iron product to Port๏Rail: • Main continental E-W standard gauge rail line runs right through the Braemar Iron Formation • Deposits are a 150km - 300km rail trip from Port Pirie where a Pellet Plant could be established • ARTC to upgrade E-W corridor in 2012 • Existing unused line capacity of 10Mtpa • Rail access to each mine requires a 35km ‘spur’ into train loading bins • ‘balloon loop’ required at each mine for train turn around and 24 hour loading/unloading • Need 2,000m long trains, 25 tonne/axle, 100 tonne wagons and 20,000 tonne train set capacity minimum • Future line duplication needed to provide sufficient train paths beyond 10Mtpa • Need significant stockpile hardstand and negative pressure storage sheds at Port or Pellet plant
Braemar Ironstones: Transferring Concentrates to Port๏Slurry Pipeline: • Slurry transfer is a cost effective alternative to rail haulage for a long-term mining project • Slurry transfer applies to concentrate movements • We envisage a 300km long buried pipeline to Port Pirie or 380km to a deep water port location • It requires a 600mm diameter Concentrate delivery pipe + Return Water Line • Examples: ✴Century Zinc’s 300mm diameter concentrate pipeline is 304km long, moving concentrate in slurry ✴Minas Rio iron project, Brazil, 600mm diameter pipeline is 522km long, to transport 24.5Mtpa of concentrate • 2-3 intermediate Pump Stations • Port Dewatering station & Concentrate storage • both rail and slurry line solutions could be used to transport >25Mtpa of concentrate
Braemar Ironstones: Port for bulk loading of ConcentratesBiggest challenge to development of new mines is lack of bulk handling port infrastructure:• Port Adelaide: capacity is only 1.7Mtpa and too far away for the transport volumes given• Port Pirie: capacity expanding to 8Mtpa, but has very shallow draft capability of ~4m• Port Bonython: extra rail distance incurs additional haulage charges via Port Augusta Braemar Iron Alliance sees an emerging requirement to berth 200,000 DWT ‘Cape Size’ vessels for sea freight of iron concentrates, Pellets & direct shipping ore: up to 100Mtpa port capacity, all bulks up to 250 ships loaded per year 6,000tph loading rate 320m long, double sided berth Need 20m draft in Spencer Gulf Port Pirie not suitable Alternative deep water sites in Spencer Gulf jetty length ~3km? Capital cost maybe +$750 million
Braemar Ironstones: Sea Freight differentials, SA vs WA Ex Port Hedland 3,200Nm Ex Spencer Gulf 5,300NmNote: Nm means nautical miles
Braemar Ironstones: Sea Freight differentials, SA vs WAExtra sea voyage distance of 2,100 km & time from SA imposes a cost penalty to be overcome: Sea Freight ex Port Hedland, WA Destination Distance Nm Cost US$/tonne China 3,200 $9.7 Japan 3,400 $10.4 ~US$100M Sea Freight ex Spencer Gulf, SA per year Destination Distance Nm Cost US$/tonne Penalty US$/t penalty for 25Mtpa China 5,300 $13.8 $4.1 trade. Ports Japan 5,300 $13.8 $3.4 need to be competitive Source: Citigroup, AME Note: Nm means nautical miles
Transport Infrastructure challenges for bulk iron from the Braemar Iron Formation.