A significant review of Iron Road’s Central Eyre Iron Project (CEIP) has identified lower upfront capital requirements and that production could start two years earlier than expected.
The review, conducted by Thiess-RWE, focused on opportunities relating to early ore access and mine establishment costs, while leveraging efficiencies offered by the application and flexibility of proven, continuous mining systems.
Iron Road said the upfront mine capital cost estimate, excluding pre-strip, had been reduced by between US$130 million and US$965 million.
The review targeted objectives including reducing upfront capital requirements, extracting ore reserves earlier to accelerate the ramp-up profile of iron concentrate output, decreasing the upfront pre-strip and waste mining period and identifying other efficiencies.
Undertaking the review and targeting initial areas of the orebody to optimise rapid ore delivery ensures the process plant could increase output of the CEIP’s high-quality iron concentrate about two years earlier than the 2015 optimisation study timetable.
Iron Road managing director Andrew Stocks said that was vital.
“The most important thing to come out of the review is that all production commences two years earlier and this is significant because it means we can start paying back capital two years earlier.”
Iron Road said it was planning to start a sole-source early contractor involvement (ECI) process with the mining contractor that displayed the “greatest appetite” for exposure to a high-value, long-term mining services contract.
It said the ECI process would be designed to ensure the company and the selected contractor focused their efforts on generating an outcome that was the best for the project, with built-in and agreed stretch target objectives to meet all of the operational and financial objectives.
Mr Stocks said the Eyre Peninsula project was progressing well.
“I think things are going well, even if it is moving forward a little slower than we would like,” he said.
“But we are confident we will build this project and it will be a significant contribution to Eyre Peninsula for decades to come.”
He said the next step for the CEIP came in three parts.
“We have received primary approvals for infrastructure and now we are going through secondary approvals for the mining lease and development approvals, arranging companies to help construct the project and project funding,” he said.
“Those three aspects are the next step.”
Mr Stocks said the project’s time frame was contingent on project funding but Iron Road hoped to have a final investment decision by the middle of 2018.