Ground breaking ceremony marks start of new iron ore mine

The Premier of Western Australia, Colin Barnett - known for his keen interest in resource development - joined Australian and Chinese officials Sunday for a ceremony to mark the start of a magnetite-iron ore project that will help open up the Mid West region of the State

PERTH - 

The Karara iron ore project, 225 kilometres east of the port of Geraldton is Western Australia's latest iron ore mine as a result of the new wave of companies that have broken the total dominance of BHP Billiton and Rio Tinto in the Western Australian iron ore business. The first to break the padlock was Fortescue Metals Group in the Pilbara two years ago.

Karara is a joint venture between Gindalbie Metals Ltd (ASX: GBG) and major Chinese steel and iron ore company Ansteel.

Gindalbie's managing director Garret Dixon said Karara was the first major mine development in the Mid West and also one of only a handful of new magnetite projects to be developed in Australia. These magnetite projects herald a new era of downstream processing for the industry in the emerging Mid West iron ore province.

Initial site clearing activities and preliminary earthworks started early in November following receipt of final Commonwealth environmental approval and State Government environmental approval.

The project will initially produce 10 million tpa of iron products in 2011, comprising 8 Mtpa of high-grade magnetite concentrate, a value-added product, and 2 Mtpa of direct shipping ore (DSO). Karara was said to have potential to produce more than 30 Mtpa over a mine life of more than 30 years.

Karara will initially generate around A$1 billion (US$907 million) in annual export revenues, building to A$3 billion (US$2.72 billion) annually as the project grows.

Iron products will initially be exported through Geraldton Port, with Karara also able to commit foundation tonnages to underpin the development of the new multi-billion dollar Oakajee Port in the region.

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