A 50:50 joint venture of Gindalbie Metals and China steel producer Ansteel has begun construction of its Karara iron ore project in Western Australia, 225 km east of the port city of Geraldton. The project will initially produce 10 million mt/y of iron products commencing in 2011, comprising 8 million mt/y of high-grade (68.2% iron) magnetite concentrate and 2 million mt/y of direct shipping ore.

The companies report that the Karara deposit has the potential to produce more than 30 million mt/y of iron products over a mine life estimated at more than 30 years, and in line with those expectations, much of the on-site and associated infrastructure for the Karara project is being designed and built to accommodate production levels well in excess of 8 million mt/y.

Karara project development is based on a current probable ore reserve of 522 million mt of iron ore, grading 36.3% iron. Indicated and inferred resources exclusive of reserves total 1.8 billion mt, grading 35.4% iron.

Ore will be mined by conventional open-pit methods at a rate of 20 million mt/y. The waste-to-ore stripping ratio will be a low 0.34:1.

Karara production will be transported over a new 85-km rail spur that will be built from Karara to Morawa, where it will connect to an existing rail line to Geraldton. Facilities upgrades at the Geraldton port will include dedicated Karara storage facilities and capacity to export up to 14 million mt/y. A proposed new port at Oakajee, north of Geraldton, is expected to handle expanded future Karara production.