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Second off-take agreement for Hawsons

Friday, 22nd April, 2016

By Craig Brealey

The Hawsons iron ore project, south of the city, has signed a deal with the world’s biggest independent producer of iron ore pellets.

The application for a mining licence has been submitted and if all goes to plan, about 1200 workers will be needed to build the mine in the next few years, and most of them will be drawn from Broken Hill, according to the project’s majority owner, Carpentaria Exploration.

Once the mine is established, it will employ about 600 people full time, the company said.

In March, Carpentaria signed up the Japanese company, Mitsubishi, and this week it announced that it had recruited Bahrain Steel which makes the pellets from iron ore that are used in the production of steel.

Bahrain Steel runs two pelletising plants in the Kingdom of Bahrain, in the Persian Gulf, and has can produce 11 million tonnes per year for steel companies in the Middle East, India, the Far East and South East Asia. 

Carpentaria Exploration, which owns 62 percent of the Broken Hill project, said that it signed a non-binding “letter of intent” for the supply of three million tonnes per annum of supergrade pellet feed to Bahrain Steel. 

The deal meant that at least 30 per cent of planned production could be sold to the high value market, where projects capable of meeting the high specifications required were rare and suppliers few, said Carpentaria’s Managing Director, Quentin Hill. 

The parties intended to develop binding arrangements, initially for a 10-year term, with the first supply to be made by 2020. 

Mitsubishi has signed an agreement for the supply of one million tonnes per year of supergrade pellet feed. 

The magnetite iron ore deposit was discovered in 2009. It is in South Australia, 60km south-west of the Silver City, and has the benefit of being close to power infrastructure, rail lines and roads which means the ore can be shipped abroad from Port Pirie.

The rock is also uniquely soft which makes it easier and cheaper to mine, said Mr Hill. 

“We are positioning Hawsons to be the preferred new iron development for international investors, based on its supergrade product, super location and super-competitive costs,” he said. 

“Hawsons has an excellent outlook to become a long-term, low cost premium iron operation, delivering wealth to shareholders and new jobs and other economic benefits to Broken Hill.” 

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