Australian iron ore mine sees potential of investments from India

Lake Giles Iron Project in Western Australia, which has iron ore resources of 66-69 per cent Fe Fines grade, is looking for investment partnerships as well as supply contracts for its USD 500 million mine development in the process.

Formalising strategic partnerships for the development and infrastructure required to commercialise the Lake Giles Iron Project remains a key focus this year, said Richard Moon, General Manager for International Sales and Marketing at Macarthur Minerals, the developer of Lake Giles, at the Singapore International Ferrous Week.

“The company is in active discussions with a number of global corporations that have the potential to add capital and technical capabilities to the project,” said Moon, stressing on the possibilities of the Indian steel sector participation.

Moon expects 10 per cent to 20 per cent Indian investment in the USD 500 million Lake Giles development, which is expected to produce three to four million tonnes/year of higher-grade ore, out of which one to two million tonnes could be supplied to India. Green steel is made using hydrogen rather than coal, and is expected to go a long way to tackling climate change.

Lake Giles is expected to commence iron ore production from 2026.

“We are planning to use a lot of renewable energy in our project while India is expected to use hydrogen among other sources of energy to make Green Steel,” Moon told PTI. Meanwhile, South Australia’s Razorback project, with resource of 68.5 per cent Fe Fines magnetite content, is also evaluating investors for its USD 500 million development. Razorback is under various stages of studies, including feasibility and final investment decisions, with production expected to commence from 2025.

“We are embarking on early stages of financing of our project and are looking for strategic partners in Australia’s high-grade magnetite resources,” said Stephen Weir, CEO of Magnetite Mines Ltd, which owns the project with a resource of 4.2 billion tonnes from two very large magnetite iron ore deposits.

The Direct Reduction Iron (DRI) process and the use of energy such as hydrogen can turn magnetite grade ore into Green Steel, according to Weir, who noted India’s long-term plans to produce Green Steel.

Traders see potential of Indian investments in the two mega mines, with each getting USD 50-100 million, or 10 per cent to 20 per cent, but tied back to supply of magnetite ore contracts at competitive prices. India’s highest ore grade is 64 per cent Fe Fines, and imports of 66-69 per cent Fe Fines will help in making more higher grade environmentally-friendly steel, said the traders at the opening of the conference on Tuesday.

Though owners of iron ore resources are not giving much clearer indications of the investors, given the uncertainty created by the Ukraine-Russia war, traders said it will be logical to draw investors from North Asia and India, where mills are upgrading to produce environmentally-friendly products.

Logically, China and India would be the big buyers of higher-grade iron ores over the long term though all are watching the impact of Ukraine-Russia war on global prices, said the traders.