The Onslow iron project (formerly known as the Ashburton project) is one of the largest iron ore developments undertaken in Western Australia.
In August 2022, the Red Hill Iron Joint Venture (RHIOJV) parties took an unconditional final investment decision (FID) to develop the iron ore assets as part of Ashburton Hub Development.
The first stage of the Onslow Iron Project will include RHIOJV tenements that contain 820Mt of mineral resources and 537Mt of ore reserves.
As of August 2022, early construction activities including bulk earthworks have started at the Port of Ashburton, south of Onslow.
The first ore from the project is expected to be shipped as early as December 2023.
Mineral Resources (MinRes) owns a 40% stake in the RHIOJV, while the remaining 60% interest is with API Management (APIM) on behalf of the parties to the Australia Premium Iron Joint Venture (APIJV)- Aquila Steel and AMCI (IO).
Aquila Steel is a wholly owned subsidiary of Baosteel-backed Aquila Resources, while AMCI (IO) is owned by AMCI (51%) and POSCO (49%).
MinRes will hold 57% direct ownership interest in commercial production and an additional 3.3% indirectly through its existing 15% shareholding in Aquila’s parent entity Aquila Resources.
MinRes will sell half of the production to Baosteel, which has an option to purchase a further 25% under a life of mine offtake agreement.
The remaining product will be jointly marketed by MinRes and AMCI.
Location, site details and mineralisation
The Onslow Iron project is located in the West Pilbara region of Western Australia. The site is around 150km from the town of Onslow.
The project will seek to unlock stranded deposits that would have remained undeveloped. After recovery, the production will be transported from RHIOJV tenements to Ashburton Port for export using road trains.
According to JORC Code 2012 Edition, RHIOJV has a mineral resource estimate of 820Mt at 56.4%. In 2015, Red Hill Iron reported JORC Ore Reserves of 537Mt at 57.2% Fe at a strip ratio of 0.79:1 covering multiple deposits.
The project is expected to entail a total capital expenditure of around $3bn. The figure represents a capital intensity of $65 per capacity tonne.
RHIOJV FOB operating costs, excluding royalties, are expected to be $32.23 per tonne. The joint venture will also pay MinRes an infrastructure capital charge of $7.74 per tonne.
According to the Binding Project Development Term Sheet, MinRes will secure an additional 17% participating interest in RHIOJV by funding RHIOJV capital expenditure of $1.3bn through a carried expenditure loan.
Mining and infrastructure
MinRes is the manager of the RHIOJV. It will also deliver all mining services for the project, under crushing and mine-to-ship agreements.
In Stage 1, MinRes and its JV partners in the Onslow Iron ore project are targeting an annual capacity of 35 Mtpa.
MinRes will provide its equipment designed to process and move bulk commodities cost effectively with a reduced environmental footprint.
The company will deploy assets such as NextGen crushers, autonomous 320-tonne jumbo road trains and 20,000-tonne transhippers.
MinRes will invest, own, build, and operate all the off-site infrastructure. This includes a 150km private haul road, gas pipelines, port infrastructure at the Port of Ashburton, transhipper wharfs, and two resorts to accommodate the workforce.
The project will be completely dust-free from pit-to-port.
Infrastructure at the Port of Ashburton
MinRes, through its subsidiary Onslow Iron Pty Ltd, proposed to develop infrastructure at Ashburton port to support mining operations.
This includes storage and bulk handling of ore at the Port of Ashburton, a modular jetty wharf, dredging a dedicated berthing pocket beside the existing Material Offloading Facility and ship loader, and other ancillary landside infrastructure.
It also plans to use five offshore anchorage areas for the transhipment of ore to Ocean Going Vessels.
The landside and marine facilities will help in exporting up to 40 million tonnes of ore per annum, over 30 years.
The Onslow project will create around 2,100 direct jobs and 6,300 indirect jobs during the construction phase. The mining project will also generate 1,200 permanent and 3,600 indirect jobs during operations.
The project will also deliver $190m in corporate taxes and $150m in royalties annually.