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Australian billionaire Gina Rinehart’s private company, Hancock Prospecting Pty Ltd., is considering the development of a $3.3 billion iron ore project in Western Australia.
Hancock acquired a 51% interest in the Mt Bevan project from Legacy Iron Ore Ltd. and Hawthorn Resources Ltd., according to statements from the two smaller, listed miners on Tuesday. By funding further studies, Hancock can increase its holding to 70%, they said.
Australia is the world’s largest iron ore shipper, and income from the steel-making material is the principal driver of Hancock’s revenue, although it’s expanded recently into other materials including lithium and rare earths, as well as copper and gold. While futures have sagged this year as Chinese demand shows, the bulk of Australian projects still have costs far below current levels.
A pre-feasibility report for Mt Bevan released on Tuesday estimated capital-investment costs of A$5 billion ($3.3 billion) to develop the 12 million ton a year mine, with a 25-year life. Ore would be transported in a 125 kilometer (78 mille) slurry pipeline to a rail line, before being exported from the port of Esperance.
Operating costs for the project were estimated at $64 a ton, according to the study. Iron ore futures in Singapore were last near $108 a ton after slumping by about 23% this year.
(By Paul-Alain Hunt)
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