Nullagine JV partners set to help further WA’s mining revenues
When BC Iron’s Nullagine joint venture in Western Australia’s Pilbara was officially opened during mid April, it literally hit the ground running.
Along with JV partner Fortescue Metals Group, the company had already seen 20,000 tonnes of its ore exported through Port Hedland and another 20,000t moved.
It also looked on course to achieve its 180,000t shipment target (weather permitting) from June onwards.
Nullagine’s birth was significant for a number of reasons.
Aside from the fact it marked the arrival of a new mining operation – which itself was a reason to celebrate – it also represented the first time third party iron ore had been transported using existing Pilbara infrastructure (in this case the rail and port facilities owned FMG).
Additionally, it took BC Iron less than five years since listing on the ASX to get the operation going.
Also, the operation has shown FMG’s willingness to embrace junior partners in what is a 50:50 JV.
Finally, the native title negotiations went smoothly with the Palyku Native Title Claim and the Nyiyaparli People, the latter of who were crucial in the venture’s establishment of the project’s southern haul road.
While officially opening the operation, the sitting member for the Mining and Pastoral Region – Ken Baston – said Nullagine would help further strengthen the WA economy and add to the benefits which were already flowing through from the mining sector into the state’s community.
He also highlighted the profound impact iron ore was having on WA’s balance sheet.
“Mineral and petroleum exports last year accounted for 91% of the state’s total export earnings in 2010,” he noted.
“Furthermore, WA led the nation in attracting mining capital investment. This was reflected in the value of the state’s resources industry to the local economy.
“Last year the sales surged to a record $91.6 billion.
“Of course it will come as little surprise to you that iron ore recorded the biggest growth and made up the bulk of the sales.
“The commodity was worth an astonishing $48.5 billion and accounted for 53% of total sales.
“New and expanded mines lifted iron ore production by 10% to a record 391 million tonnes last year.”
Later, during a press conference, colourful BC Iron managing director Mike Young said one of the reasons for the company’s success was the fact it had been willing to extensively consult with all of the main stakeholders – including the WA Government.
It was, he explained, pivotal that the company had talked to the people in all the relevant departments.
“It amazes me how many people who put a mining proposal in don’t go and talk to the government first – it makes life so much easier,” Young noted.
The BC Iron boss also indicated that the Nullagine operation – which has an annual target of 5 Mt – could produce 7 Mt per annum with some infrastructure upgrades.
“FMG doesn’t plan to have a lot of spare capacity I wouldn’t think, so that’s really a matter of how much capacity is available,” he said.
“At this deposit that is as high as we could go on an annualised basis, but I think at 5 Mtpa we’ll be pretty busy.
“It’s a lot of dirt.”
Young also said it was a good time to be a new iron ore miner, despite the planned introduction of a minerals resources rent tax by the Labor Federal Government.
“It’s a tax on profit, right? So if you’re profitable you’ll get taxed,” he said.
“It’s a bit like income tax – everyone grizzles about it, but you are making money, so it’s a great time to be an iron ore producer.”
Mark Fraser is editor of Gold and Minerals Gazette