Western Australia is expected to get a new $2billion steel project to add value to the State’s much sought after iron ore.
State Development Minister Clive Brown has approved a proposal by Mineralogy Pty Ltd and its co-proponent Bellswater Pty Ltd (together known as Mineralogy), to build two new processing plants in the Pilbara at Cape Preston, south west of Karratha.
Mineralogy will construct the $2billion project and operate it, subject to all State environmental and safety requirements, in accordance with the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002.
Successful completion of the value adding project will see a two million tons per annum (mtpa) direct reduced iron/hot briquette iron plant and a seven mtpa pellet plant in operation by 2009.
The new project is planned to be undertaken with and financed by major investment from Chinese Government companies, which are leaders in China’s steel industry.
In making this announcement Minister Brown said the Gallop Government’s hard work in promoting downstream processing was paying off.
“While the mining side of the iron ore mining industry is going through a rapid growth phase at present, the Government has been working hard to capture higher levels of value-adding to our resources,” Mr Brown said.
“The Chinese interest in this project is a direct response to the Gallop Government’s work encouraging investment in down stream processing in WA.”
The Minister said it was planned that 100 per cent of all production would be provided to Chinese steel mills and the proposed pellet plant was in addition to another proposed seven mtpa pellet plant - the International Minerals project - approved late last year.
“In accordance with the terms of its State Agreement, Mineralogy has indicated that, in addition to direct Chinese equity investment, it will seek export credit finance of around $760million from agencies in China and Europe to assist project funding,” he said.
Under the approval granted, Mineralogy was required to have all of its financing in place by May 26, 2006.
Mr Brown said it was estimated that over its life, the project would generate more than $32,000,000,000 (thirty two billion dollars) of exports for Western Australia.
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