Extension Hill Direct Ship Iron Ore Project – Seven Years in the Making

Direct ship iron ore (DSO) operations at Extension Hill in Western Australia’s Midwest region have commenced, with fi rst product railed to the port of Geraldton in July 2011. Reserves are 14.8 million tonnes (Mt) of haematite-goethite ore overlying an Archaean BIF-hosted larger magnetite deposit which Mount Gibson Iron Limited (MGI) sold to other parties in 2006.Some unique geological aspects of the deposit shape DSO mining and processing operations. Owner-operator selective mining, blending, crushing and screening on site will produce three million tonnes per year (Mt/a) of Lump and Fines product to be trucked 86 km to Perenjori, railed 232 km to Geraldton, and loaded aboard Panamax-sized ships through the dedicated iron ore shiploader at the Geraldton Port Authority’s Berth 5 facility.The statutory approvals process for this project formally began in 2004, dominating delays in a predevelopment phase which extended over a longer period than the likely life of DSO operations. The lack of transparency, uncertainties and costs inherent in state government processes have influenced decisions made by MGI while assessing other development opportunities in Western Australia. Potential for additional Reserves exists at Extension Hill, however MGI’s ability to extend the mine life will hinge on statutory approval to explore for and evaluate other DSO resources on surrounding granted mining leases.The nature of the resource and use of existing infrastructure for product transport have enabled MGI to keep operating costs and capital intensity of this project relatively low. A tenacious development approach by MGI and robust project economics have fi nally enabled this site to take its place as a revenue earner beside the company’s other DSO operations at Tallering Peak and Koolan Island.