Projects

Sino Iron Project, Cape Preston

The Sino iron project will be the world’s biggest magnetite iron ore mine when fully operational.

Producer of
Magnetite ore
Mining Method
Open-pit
Location
Cape Preston, Pilbara, Western Australia
Total Reserves
24 billion tonnes on completion
Start of Construction
2006
Expected Mine Life
25 years
Owner
CITIC Pacific Mining Management
Main Contractor
China Metallurgical Group Corporation
Other Contractors
Forge Group Construction, Golder Associates, Wylie and Skene, BGC Contracting
Suppliers
DSMAC, Metso Minerals, Wormald

The Sino iron project will be the world’s biggest magnetite iron ore mine when fully operational. The open-pit mine, located in Cape Preston, about 100km south-west of Karratha in the Pilbara region of Western Australia, will produce magnetite concentrate and pellets. The estimated lifespan of the mine is 25 years.

CITIC Pacific Mining Management purchased the mining rights over the property from Mineralogy, a company owned by popular entrepreneur Clive Palmer, in 2006 and initiated construction in the same year.

The project was completed in 2014, approximately four years behind schedule. It consists of six production lines, of which the first two lines were operational by end of 2013. First shipment of fine iron ore from the mine was made to China in December 2013.

The project has not only suffered significant delays and consequent cost overruns but was also entangled in legal disputes with Mineralogy as the latter filed a case to cancel CITIC Pacific’s mining rights over the property citing the failure of royalty payment as the reason.

China Metallurgical Group Corporation (MCC) is the engineering, procurement and construction management (EPCM) contractor for the project.

Geology, reserves and mineralisation of Sino iron ore deposit

The Sino iron project geologically lies near the George Palmer deposit, which is situated within the Hamersley basin and hosts two banded iron ore formations (BIF) of 300m and 150m thicknesses.

The mineralisation occurs in a steeply dipping BIF comprising of high-graded magnetite and haematite, and low-graded carbonates, silicates, phosphorous and chert contaminants.

The two production lines of the first phase produce up to four million tonnes of powdered iron each. The mine will produce around 24billion tonnes of iron ore annually once all the lines are operational.

“The mine will produce around 24billion tonnes of iron ore annually once all the lines are operational.”

Iron ore mining at the Sino project

Conventional open-cut mining methods including drilling, blasting, loading and hauling are used to mine iron ore from the Sino deposit. The pit will be approximately 500m-deep. Processing facilities at the mine site include a crusher, a concentrator, and a 6mt pelletising plant.

The crushed ore enters grinding mills where fine ore stream is produced and transferred to magnetic separators to produce a concentrate. The concentrate is thickened and stored before pumping to the port. It is filtered to reduce moisture and exported for use in steel making.

A 450MW power station consisting of SGT-800 gas turbines by Siemens supplies power to the plant. Apache Northwest and Santos Offshore signed a $1.3bn gas supply agreement to supply gas sourced from the Reindeer offshore gas field to the power plant at the mine site.

“Offshore signed a $1.3bn gas supply agreement to supply gas sourced from the Reindeer offshore gas field to the power plant at the mine site.”

Ancillary facilities at the mine include a 140,000m3 per day desalination plant and a dewatering pit with a filtration area of approximately 5,600m². The EPC contract for the desalination plant was awarded to Ausenco.

A 25km slurry pipeline transports the end product to the port.

Contractors, subcontractors and suppliers

Forge Group Construction was contracted for the design and construction of a number of facilities at the mine, including filter building structures, foundations for equipment such as stackers and tanks, as well as the main control building at the port.

Golder Associates was involved in various stages of the project right from the exploration stage to the development stage, in activities such as reviewing the reserves, on-site drilling, GIS services and tailing studies.

Cimeco, a Forge subsidiary under a $40m contract completed the civil works for the mine’s stockpile area. Kerman Contracting completed works associated with production lines three to six.

Wylie and Skene, a wholly-owned subsidiary of VDM Group, was awarded a contract by MCC for the construction of accommodation and warehouse facilities at the project site. VDM, under a $240m worth, 50:50 JV with NRW Civil & Mining, performed earthworks at the mine.

Structural, mechanical and piping (SMP), electrical, and concrete works were carried out by Thiess. BGC Contracting built the foundations for six trains of autogenous grinding (AG) mills and pebble crushers under an $80m worth contract. Reinforced Earth constructed the walls for crushers three and four under a contract from BGC Contracting.

Catalpa was engaged in casting the in-situ intake pumping station and constructing the associated in-situ slabs for the desalination plant.

McNally performed the design, engineering, fabrication, transport and installation of an administration office, laboratory and ablutions building consisting of 17 concrete chassis modules in total.

Murphy Pipe and Civil constructed concentrate, desalination and return pipelines for the mine using the equipment and personnel supplied by Orion Pipeline. MCC contracted Monadelphous for pipeworks associated with the concentrator. CADS assisted in the construction of the $20m slurry and return water pipelines.

The contract to construct the marine facilities associated with the project was awarded to McConnell Dowell Constructors.

Fire protection solutions from Wormald are installed at the mine. Civil works of the processing plant were carried by Allmine Group. Access roads and highway intersections were built by HICAL.

Metso Minerals supplied mineral processing equipment for the mine. Iron ore processing equipment comprising two PE jaw crushers, one PY Cone crusher, one ball mill, one ZSW vibrating feeder, one YK vibrating screen and one conveyor belt were delivered by DSMAC.

NRI Energy Technology

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