Green light for Iron Road

Iron Road’s A$4.5B Central Eyre Iron Project features a planned 6.5 km-wide open cut magnetite mine on SA’s Eyre Peninsula, and a 145 km rail corridor to a new deepwater port at Cape Hardy near Tumby Bay.

The CEIP will include a beneficiation plant and a radical Integrated Waste Landform (substituting for the usual tailings dam) within the mine footprint. Iron Road expects to export around 21.5 Mtpa of high-grade, low-impurity
concentrate for at least 25 years, with Chinese coinvestors already committed to taking 10 Mtpa.

Iron Road said the CEIP has generated “significant momentum” towards financing and construction, with the rail and port components declared a Priority Project by Infrastructure Australia in September 2016, and three major Chinese banks formally indicating in April 2017 lending appetite for the CEIP’s requisite debt financing. Progress has been backed by a strong relationship with strategic partner China Railway Group Limited (CREC).

The only remaining primary government approval for the CEIP is under the Commonwealth environmental legislation, with a decision expected to be announced within weeks.

The deepwater port and substantial heavy haulage railway will be a first for South Australia and a “profound improvement” on the Eyre Peninsula’s existing infrastructure base, Iron Road said. The export and import infrastructure is expected to become a strong catalyst for further development in the region, given Iron Road’s intent to allow third-party access to the Cape Hardy port facilities.

Iron Road said its April 2017 announcement regarding debt financing expressions of interest received from major Chinese banks was a breakthrough, indicating credible near-term project financing prospects. CREC’s 10 Mtpa offtake, proposed equity investment at both the Iron Road and project levels, and provision of a Project Completion Guarantee, were key factors behind the financial institutions’ support.