China Business

Mar 21, 2006

Aussie iron ore processor in China talks

PERTH - Iron ore developer Gindalbie Metals Ltd is in discussions with China' second largest steel mill, Ansteel, about possible joint ventures to develop its Karara project.

Gindalbie said negotiations were progressing but reports of a signing ceremony between Gindalbie and Ansteel were premature. Gindalbie today also released the first resources

statement for the magnetite component of the project, outlining more than 737 million tonnes of ore graded at 37.1% iron.

The first estimate beat expectations by 84% and has prompted Gindalbie to rethink the scope of the planned mine. The base case production will now be considered at seven million tonnes a year, up from the previous forecasts of four million tonnes a year.

Magnetite has a lower grade of iron than more traditional hematite iron ore and needs to be processed before it can be exported. Gindalbie's processing facilities will turn the magnetite ore into pellets and concentrate which can be used in steel mills.

Managing director David McSweeney said in addition to discussions with Ansteel, Gindalbie was also talking with other potential off-take partners and international financiers. "The level of interest in this project is very high, providing recognition of the quality and potential of the Karara project to become a major regional supplier of pellets over the next few years," Mr McSweeney said.

Gindalbie is also targeting the higher-grade hematite mineralization at Karara, which will be brought into production ahead of the magnetite. Initial production from hematite is scheduled for the middle of next year, starting at 1.5 million tonnes a year. Shares in Gindalbie gained 3.5 cents to 47.5 cents by 1320 AEDT.

(Asia Pulse/AAP)

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