Atlas Iron Completes Bankable Feasibility Study for Pilbara Independent Rail

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Researched by Industrial Info Resources (Perth, Australia)--Atlas Iron Limited (ASX:AGO) has completed first phase of the preliminary evaluation for the Pilbara Independent Rail Project, as a part of an alliance with Aurizon Operations (formerly known as QR National) and Brockman Mining (ASX:BCK) in early April 2013. The study looks at the merits and economic viability of constructing a 600-kilometre, standard-gauge, heavy-haulage rail line and rail spurs linking Atlas Iron's existing stockpiles at Port Hedland (as well as those of other independent iron ore producers in Pilbara region, including Brockman Mining) with their multiple iron ore mines in both the North Pilbara and Southeast Pilbara regions.

At present, Atlas Iron has three operational iron ore mines in Pilbara that will benefit from the development of the rail project. These include the Pardoo mine, located approximately 75 kilometres east of Port Hedland; the Wodgina mine, located approximately 100 kilometres south; and the newly operational Mount Dove mine, located approximately 65 kilometres south. All three mines produce direct shipping ore (DSO), and the product is trucked to the nearby multi-user Utah Point at Port Hedland for export. These three mines will account for an estimated total production of 8 million metric tons per year of DSO by mid-2013. Apart from these operational facilities, Atlas currently has three other projects in various stages of development in Pilbara that will be expedited due to the development of the rail facility.

Brockman Mining is currently developing its Marillana Iron Ore Project in Pilbara, which is located approximately 100 kilometres northwest of the town of Newman. The proposed development involves construction of a mine and processing plant to produce an estimated of 17 million to 20 million metric tons per year of iron ore.

The study has considered potential options that can be achieved across the supply chain, and work will now focus on the scope and timing for a further feasibility study. Atlas Iron is also in the process of working out a rail access deal with Fortescue Metals Group (ASX:FMG). Experts speculate that an independent rail project in the midst of widely tipped iron ore prices seems farfetched and striking an access deal with FMG would be a more feasible solution for Atlas Iron. However, Atlas Managing Director Ken Brinsden said that "the results of the joint study support our view that an infrastructure solution for junior miners in the Pilbara is viable and could be realized."

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