The news media brought yet more evidence this week of South Australia’s emergence as a rising star in the iron ore world.
Iron ore resource upgradeArrium – the iron and steel producer formerly known as OneSteel – announced its intention claim the No. 4 spot among Australia’s iron ore miners, largely by doubling its exports from the state to 12 Mtpa by mid-2013.
The news follows Iron Road’s headline-grabbing announcement last week of a huge leap in the mineral resource of high-grade magnetite gneiss at its Central Eyre Iron Project, to more 2.6 billion tonnes, with possibility of it doubling again.
Arrium says most of the increased iron ore sales will come from its Middleback Ranges and Southern Iron projects, with the first shipments to be delivered through Whyalla Port in the December 2012 quarter.
The new Whyalla Port facilities will result in an Inner Harbour capable of about 7Mtpa. “We expect a 12 Mtpa sales run rate by July or August 2013. Port capacity is expected to double to 13 Mtpa by mid 2013,” said Arrium’s chief executive Mining Greg Waters.
“We aim to lift iron ore sales to match capacity of the port through maintaining sales from existing MBR operations at around 6Mtpa and converting Southern Iron to 10 years of supply.”
It was hardly surprising, then, that shortly before Arrium’s bold announcement, news broke that the company was being eyed by a consortium that included Korean steelmaker POSCO and Hong Kong-based commodities trader, Noble Group.
No doubt hoping shareholders and investors would snatch up their offer of 75c a share – later revised up to 88c – while global iron ore prices remain uncertain, the would-be suitors were utterly dismissed by the Arrium board, who refused even to engage with them.
Markets analysts expect the bidders to return for another bite at the cherry. And who could blame them for wanting a piece of South Australian iron ore action?