Western Australia's CITIC Pacific Exports First Iron Ore Shipment to China from Sino Project

Researched by Industrial Info Resources Australia (Perth, Australia)--CITIC Pacific Mining (Hong Kong) exported its first iron ore shipment to China this week from its $8 billion project in Pilbara, Western Australia. The Sino iron ore mine and pellet plant is located in the Cape Preston Port industrial zone, southwest of the mining town of Karratha. It primarily will supply magnetite concentrate to steel mills in the Jiangsu province.

The project has been under construction since late 2008 and was delayed due to multiple technical and operational issues. Further delays were experienced during the commissioning phase, which took almost an entire year. The first shipment was estimated to be 40,000 tonnes of iron ore from what is considered to be the largest magnetite iron ore mine in Australia.

The Sino iron mine and pellet plant is capable of producing approximately 21 million tonnes of iron ore concentrate and 6 million tonnes of iron ore pellets through its concentrator and pellet plant. It also involves construction of a 51-gigalitre desalination facility, using reverse osmosis technology to provide process water for the mine. A 450-MW, natural gas-fired power station was completed in late 2012 to support the mine and processing facilities.

The project is expected to have a mine life of about 30 years. An estimated 4,000 people worked during the construction phase, and a permanent workforce of 1,000 people will be required for the operational phase of the mine. CITIC is hoping to achieve the full production ramp-up over the next six months.

CITIC bought the mining tenements from Australian mining magnate Clive Palmer, who is now a federal MP, in 2006. Palmer's private company, Mineralogy Limited, controls Cape Preston, through which the ore has been shipped. The former Labor government originally granted Mineralogy the right operate the port. However, the state of Western Australia pressured the federal government to revoke the license, on the grounds that Palmer's company does not have the expertise and capability to operate the facility. Palmer has since launched the legal action and is claiming a total of $450 million in royalties from CITIC.

CITIC seems to have found a way around the dispute to continue the production and shipment. Western Australian Premier Colin Barnett, who launched the first shipment with CITIC chairman Chang Zhenming, said that "the Sino iron project represented the investment opportunities available in the state, which has significant magnetite reserves."

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