Published on March 17, 2014
7th Annual Mining the Pilbara Latest Developments in the West Australian Magnetite Industry 16 July 2013
Economic benefits of magnetite
Magnetite Concentrate vs DSO Production Process 5 Value-adding in Australia Magnetite Concentrate Production Process - Fe3O4 Mine → Crush → Grind → Separate → Concentrate → Stockpile → Ship 5
Benefits • Magnetite has minimal value as raw ore – requires massive beneficiation before it is saleable to the steel industry. • This processing is energy and emissions intensive in Australia. • Producing steel from magnetite has lower overall carbon emissions than using hematite. • Capital intensive downstream processing provides long term jobs, regional development and infrastructure. • The national interest is served by recognising that magnetite results in lower global emissions and greater domestic economic benefits.
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
Objectives Formed in April 2009 to: • Provide legislators with evidence based arguments for the promotion of the existing and emerging magnetite industry, and by doing so provide MagNet with the opportunity to influence public policy and debate; • Maximise public policy settings that will attract investment; • Build widespread recognition within all tiers of government and the public as to the benefits to Australia from the magnetite industry and its regional development & value adding potential; • Promote Australian magnetite projects as an important emerging group within the iron ore industry; • Demonstrate the significant net global reduction in carbon emissions that result when magnetite is compared to hematite iron ore steel production; and • Demonstrate the significant economic, social and regional development opportunities from magnetite projects.
State Royalties • Exempted from current Review of Royalties announced with State Budget in May, 2012 Magnetite Rebate • In November, 2012 Premier announced that royalty rebates will apply to new projects • Reduction of 50% from current 5% for first year of production • Detail of policy in negotiation
Where to on Carbon Pricing? • December 2011 – Minister Combet announces 66% moderately emissions intensive assistance – free permits • Based on 4Mtpa production in total – Arrium and Grange Resources – different emissions to WA projects • Inequity created as no WA projects were yet in production so not factored in to allocative baseline used for free permit grants • Two WA projects start this year with 40Mtpa combined production- higher intensity emissions • Other comparable industries were granted additional special assistance such as LNG, steel.
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 differences between Magnetite versus hematite 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
Global Emissions Savings Hematite Magnetite GreenhouseGasEmissionsacrosstheglobalsteelvaluechain. Hematite vs. Magnetite Emissions Emissions in Australia Emissions overseas NB. Illustrative chart only based on Lifecycle Analysis of the Sino Iron project prepared in 2008 based on modelled emissions. 12
Karara Iron Ore Project • Gindalbie Metals Limited dispatched its first shipment of magnetite concentrate from the Karara Iron Ore Project to China on 1 January 2013. • Commissioning of the Karara Concentrator continues to progress well. The Project is on track to achieve its Stage One production capability of 8Mtpa. • The Karara Project was officially opened on 9 April 2013 by Premier Barnett and the Iron Ore port terminal in September 2012. The Karara Project has invested $3billion plus in new infrastructure in the Mid West region.
Karara Mining – Gindalbie/AnSteel JV
The Sino Iron project 15
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)
An Update • CITIC Pacific Mining continues commissioning of its Sino Iron Ore Project at Cape Preston. • It’s the largest magnetite mining and processing operation in Australia and the Sino Iron project is currently China’s biggest mining investment in Australia. 17
Delivering our commitments – local content 20
Australia and China – working together
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Megan Anwyl profiles. ... Chair MagNet. Location Australia Industry ... Chairman and Founder at Magnetite Network - MagNet, ...
Executive Director Megan Anwyl said “the Magnetite Network has ... Iron Bridge magnetite project in ... LNG industry” he said. “MagNet ...
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