Australian mining services company Mineral Resources (MinRes) announced that a final investment decision (FID) has been made for the development of Onslow Iron project.

The FID, made through Red Hill Iron Joint Venture (RHIOJV), is expected to unlock the stranded deposits at the property that would otherwise remain undeveloped.

Currently, RHIOJV is 40% owned by MinRes, and the rest by API Management (APIM) on behalf of Australia Premium Iron Joint Venture, Aquila Steel, and AMCI (IO).

Other partners in RHIOJV include Chinese steelmaker Baowu, South Korea-based POSCO, and US-based resource company investor AMCI Investments.

Onslow Iron project is part of the MinRes’ Ashburton Hub Development, located 150km east of Onslow in the West Pilbara region of Western Australia.

It will be one of the largest iron ore developments in Western Australia, with Stage 1 containing RHIOJV tenements that host 820Mt and 537Mt of mineral resources.

Mineral Resources managing director Chris Ellison said: “Achieving FID from all joint venture partners is a testimony to the Project’s credentials and demonstrates the high level of confidence all parties have in this project, which is set to redefine mining in Western Australia.

“Onslow Iron introduces a low-cost, long-life and low-risk operation to MinRes’ iron ore portfolio, along with the largest mining services contract in Australia.

“The successful delivery of the project is underpinned by MinRes’ mining services innovations, which make the project economics compelling through commodity price cycles and allow us to future proof the business against low iron ore prices.”

The RHIOJV partners have also executed a binding term sheet for the development of Onslow iron project, pursuant to which MinRes will continue as RHIOJV manager.

It will earn an additional 17% stake in RHIOJV, in exchange for funding $1.3bn in the form of a carried expenditure loan, to be repaid from APIM’s cash flow from the project.

The company will have a total of 60.3% stake in the JV, including direct ownership of 57%, along with an additional 3.3% stake through its existing shareholding in Aquila Resources.

MinRes is responsible for funding, construction, and operation of all the infrastructure outside the mine, including private haul road and port infrastructure at the Port of Ashburton.

Early works are already underway, with the entire equipment is planned to be transported to the site by June 2023 and first ore on ship targeted as early as December 2023.