Gindalbie Metals Karara Project Receives Boost

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Researched by Industrial Info Resources (Sugar Land, Texas)--Gindalbie Metals Limited (ASX:GBG) (Perth, Australia) announced that it has received final regulatory approval from the Western Australia government to ramp up construction at its Karara Iron Ore Project. The approval was the final hurdle for Gindalbie to activate the initial use of a $1.2 billion project loan, which is being provided principally by the China Development Bank and the Bank of China.

"It's pleasing to have the debt and equity funding in place and our construction teams moving into top gear across all aspects of the project," said Garret Dixon, Gindalbie's managing director. "This is a significant step that further de-risks the Karara Project and really differentiates Karara from many other projects that are still at the planning stage. Karara is one of the largest resource projects currently under construction in Australia."

The Karara Iron Ore Project, which is being developed through a joint venture between Gindalbie Metals and China's second-largest steelmaker, Anshan Iron & Steel Group Corporation (Ansteel) (Anshan, China), is 85 kilometers east of Morawa in the Western Australian Outback. With ore reserves of 522 million tons, Gindalbie plans to produce an initial 8 million metric tons per year of magnetite concentrate, which will be transported to the Port of Geraldton before being shipped to Ansteel's new 4 million-metric-ton-per-year pellet plant at Yingkou Port, which is in northeastern China. Ansteel will be using the blast furnace quality pellets produced, as well as a portion of magnetite concentrate at its newly built 6.5 million-ton-per-year Bayuquan steel mill, also at Yingkou Port.

Gindalbie and Ansteel are on schedule to commence production of magnetite concentrate and blast furnace-grade pellets by mid-2011. The project also contains numerous hematite direct shipping ore (DSO) deposits, which are being developed to begin production by early 2011, at a rate of 2 million metric tons per year.

A number of the major design and construction contracts already have been awarded, including:

• WorleyParsons (ASX:WOR) (Sydney, Australia) and AMEC Minproc (Perth, Australia): $140 million for management and construction services
• NRW Holdings (ASX:NWH) (Welshpool, Australia): $120 million for earthworks and concrete construction
• Doric Constructions (Subiaco, Australia): $70 million for Karara camp and accommodation village
• Outotec (OMX:OYJ) (Espoo, Finland): $36 million for delivery and installation of the flotation circuit and filtration technology.

This is just the start of the Karara Project, as the resources in the region are sufficient to support production of more than 30 million metric tons per year for more than 30 years, and planning is under way for the eventual expansion of the mine and concentrator. The onsite and associated infrastructure is being designed with this in mind and will be built to accommodate the increased production levels of more than 8 million metric tons per year.

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