John Welborn-chaired Fenix Resources has struck a deal with an offshoot of the world’s largest steel producer to mine and export up to 10 million tonnes of iron ore from the Mid West.
John Welborn-chaired Fenix Resources has struck a deal with an offshoot of the world’s largest steel producer to mine and export up to 10 million tonnes of iron ore from the Mid West.
Fenix Resources will pay an upfront $5 million for the mining rights to Sinosteel Midwest Corporation's tenements within the Weld Range deposit, under a new binding agreement signed between the pair.
A further $5 million will be payable upon Fenix receiving mining approvals, with the company to pay a $2 per tonne base royalty payment.
Mining is expected to start in 2024, according to Fenix.
More broadly, it marks another move by the growing iron ore miner to scale up its operations, which are currently anchored by its wholly owned Iron Ridge mine.
In July, Fenix closed a deal to buy the iron ore, port and rail assets from fellow ASX-listed miner Mt Gibson Iron in a $25 million cash-and-scrip transaction.
Prior to that, in June 2022, Fenix inked a deal to acquire to buy out joint venture partner Newhaul’s 50 per cent stake in the haulage and logistics company established between them.
Fenix has had a binding offtake arrangement with Sinosteel International Holding Company since 2020.
Fenix chairman John Welborn said the company was committed to an exciting growth path to expand its operations in the Mid West.
“Our unique road, rail and port infrastructure and capabilities provide an advantage that enables the efficient monetisation of high quality regional deposits, which for too long have been stranded,” he said.
“Fenix’s operations in the Mid West, following our strategic consolidation of our haulage business and the acquisition of Mount Gibson’s port and rail infrastructure, have significant scale potential.”
The miner sold 1.36 million tonnes of iron ore during 2023 at a C1 cost of $81.51 per wet metric tonne.
Local firm Poynton Stavrianou was engaged as financial adviser on the deal and Thomson Geer appointed as legal adviser.
