Mount Webber direct shipping iron ore (DSO) mine is located in the northern Pilbara region of Western Australia, which hosts three of the world’s ten biggest iron ore mines. It comprises of Ibanez, Fender and Gibson deposits and is estimated to produce a target ore grade of 57.2% Fe content.
The mine is being developed by a joint venture between Atlas Iron (AGO, 70%) and Altura (30%). The JV received environmental approvals for the project in May 2013 and commenced mining operations in December 2013. The first iron ore sales from the mine are expected in the second quarter of 2014. The project is expected to create 200 construction and 280 operational jobs.
The capital cost estimate for developing the Mount Webber mine is $212m. The development will be carried out in two stages with the first stage expected to operate at a rate of 3Mtpa and the second stage expanding it to 6Mtpa. The mine life is expected to be ten years at 3Mtpa production rate.
Mount Webber mine details, geology and reserves
The Mount Webber mining prospect lies approximately 170km southeast of Port Hedland and is situated on M45/1209 mining tenement. Atlas fully owns the adjoining mining tenement M45 1197 and plans to operate both the tenements sequentially during the life of the operation.
The project is situated within the Chichester sub-region filled with undulating granite and basalt plains. The sub-region comprises mainly of two alluvial units comprising of sand, silt, and gravel. As of June 2013, the mine is estimated to contain proven and probable reserves of 33.9Mt graded at 56.8% Fe.
Mount Webber joint-venture agreement
Atlas Iron and Altura formed a joint venture agreement, according to which Altura will sell its share of the ore mined to Atlas at free on board price (FOB price) at Port Hedland less the cost of sales. The point of sale to Atlas Iron will be prior to the run of mine (ROM) pad stockpile.
Altura will pay a fee to Atlas for utilising the infrastructure required for transporting the ore and marketing fee for the ore sold while paying 30% of the direct capital costs up to the point of delivery of the ore at the ROM pad.
Mining and ore processing
Conventional drill and blast followed by load and haul will be used at the open pit Mount Webber iron ore mine.
The extracted ore will be processed by 3Mtpa primary crushing and a screening facility located within the run of mine area. The primary ore will be transported to the crushing facility housing secondary and tertiary crushing circuits. The waste generated will be transferred to a 450tpa landfill facility.
Ore from the Mount Webber mine will be transported to the Utah Point loading facility in Port Hedland via the Marble Bar-Woodstock Road (MBWR). A new haul road section was laid to connect the mine site to the MBWR.
Construction and infrastructure facilities at Mount Webber mine
The major works comprise of construction of crushing and screening facility, and other infrastructure, and sealing the road between the mine and the highway for ore transportation.
Workers will be accommodated at a new 400-bed accommodation camp. A new wastewater treatment plant to treat 120m3 of wastewater per day will be built.
Financing of the Mount Webber iron ore mine
The Mount Webber DSO project is a part of Atlas Iron’s “Horizon I’ Growth Program” aimed at developing the mine and infrastructure facilities in the North Pilbara region. The programme is financed by a $275m US institutional Term Loan B finance facility and an A$50m (approximately $m) “covenant light” revolving facility.
Atlas Iron provided finance facility to Altura for meeting its share of capital costs for the Mount Webber mine. Altura is expected to repay the amount from its share of the net ore sales proceeds.
BGC Contracting was awarded a $300m mining and processing contract, in September 2013, comprising of development work, mining, and crushing and screening operations for the Mount Webber iron ore mine.
Decmil was awarded the contract to construct the accommodation village. Orelogy Group conducted the mineral reserve estimation for the mine.
McAleese Resources were engaged to conduct the road haulage transport works.