Iron ore could be exported from Onslow in WA’s Pilbara region under a new plan hatched between CZR Resources, Strike Resources and CSL Australia.
Under a new memorandum of understanding the three companies will form a consortium to secure approvals for a bulk loading export facility at the Port of Ashburton 200km southwest of Karratha.
The move would turn the tiny – by Pilbara standards – Port of Ashburton into the fifth iron ore export hub in the region alongside the ports of Port Hedland, Cape Lambert and Dampier which are tied up by the major miners and Sino Iron’s Cape Preston.
CZR will take a leading 50 per cent stake in the consortium, with CSL and Strike claiming a 25 per cent slice each.
On the table is a 5Mtpa iron ore and bulk material facility capable of taking ore via road train to transhipment vessels.
The Australian arm of Canadian transhipment giant CSL will undertake the feasibility study and have first rights of refusal to provide services for the facility should it come to fruition.
Currently, the port is primarily used as an export point for salt and LNG due to its proximity to Chevron’s Wheatstone project and several current and prospective large salt mines.
CZR Managing Director Stefan Murphy said "the three-way partnership has the potential to be a highly successful means of establishing a new export facility at the Port of Ashburton.”
“By joining forces, we increase our ability to secure necessary approvals and funding as well as significantly reducing capital and operating costs for each partner.”
“The export facility would unlock substantial value for CZR, creating many jobs and generating substantial State and Native Title revenue in the process.”
Talk of opening up new iron ore export facilities has long been a hot topic in the Pilbara.
Smaller companies have consistently raised concerns about an inability to muscle in on Rio Tinto’s turf around Dampier nor the realm of BHP, Fortescue and Roy Hill in Port Hedland.
Great hopes were raised around the height of the last boom about a multi-user port at Anketell east of Karratha designed to unlock stranded iron ore assets but the plan has never been more than a paper trail.
Balla Balla was the next great hope with BBI Group pushing the mine-to-port project, but that too is yet to see the light of day and has led to significant shareholder frustration.
BBI Group had forecast a final investment decision in 2018 for the $4bn project but several extensions later is now pencilling in a September 2023 proposal.
Even the on-again, off-again Oakajee port proposal near Geraldton has been raised as a prospective iron ore export site.
The Onslow proposal would be a big win for CZR and Strike which both hold deposits within 250km of Onslow.
CZR’s Robe Mesa project hosts a 45.2Mt JORC mineral resource at 56 per cent iron and sits on the cusp of existing Rio Tinto operations.
Strike meanwhile hosts the 1.5Mtpa Paulsens East deposit and had been stockpiling at Port Hedland’s Utah Point 600km north in the absence of a closer option.
The company’s first 66,000t shipment left Port Hedland in late August however it now has environment works approval to export 1.8Mtpa of iron ore from Onslow.
In the iron ore game cost is everything and Onslow represents an opportunity for two iron ore juniors to drastically reduce trucking costs to Port Hedland.
Should the facility get up, it could well be a game changer for the small players moving forward.
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