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China's largest magnetite ore project makes first shipment from Australia

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(Globalpost/GlobalPost)

China's largest magnetite ore project makes first shipment from Australia

PORT CAPE PRESTON, Australia, Dec. 2 (Xinhua) -- With a beep of the horn, the first shipment of magnetite concentrate by CITIC Pacific Mining departed Port Cape Preston, Western Australia, on Monday, an encouraging move for the troubled project.

Barge loaders carried magnetite concentrate product from the stockpiles on land to a ship moored offshore.

The first shipment of some 40,000 tons of magnetite concentrate will head to CITIC Pacific's special steel mill in Jiangsu Province, east China.

"Today, we see the vision of Sino Iron becoming a reality," said Chang Zhenming, chairman of CITIC Group, the parent company of CITIC Pacific.

Premier of Western Australia Colin Barnett said at the ceremony that he is confident that Sino Iron project will deliver "a major boost" to the resources-rich Pilbara region and is a great example of Chinese confidence in Western Australia.

Prime Minister Tony Abbott also sent a congratulatory message on Monday, saying "this shipment is a vote of confidence in Australia and in our mining industry."

The project, China's largest overseas investment in the resources sector, has become a cash black hole due to ballooning costs and delayed completion time. So far, the project has cost CITIC about 8 billion U.S. dollars.

The first concentrator line achieved smooth operation in August 2013, about four years behind the original schedule.

Chang blamed the lack of experience in running iron ore projects in Australia as the main reason for the expensive delays.

At present, the first concentrator line at the Sino Iron project is in operation, producing up to 4 million tons of magnetite concentrate product per year.

"The commissioning of line two is progressing and the management is focusing on ensuring it enters production as early as possible," CITIC Pacific said in a press release.

Grinding mills, the key part of the concentrator lines, have been put on their foundations on line 3 to line 6.

With all six lines in operation, Sino Iron is able to produce 24 million tons of magnetite concentrate every year.

CITIC Pacific refused to tell how much each ton of its magnetite concentrate product would cost, saying that common facilities, including the power plant, slurry pipeline, desalination plant and the facilities of Port Cape Preston, the first port built in Pilbara in 40 years, have been put into operation, incurring significant initial capital cost.

CITIC Pacific President Zhang Jijing said with all six lines in operation hopefully in two years, the average cost will be significantly reduced from the current level.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/131202/chinas-largest-magnetite-ore-project-makes-first-shipment-au