Australia’s BC Iron will go ahead with the development of its Nullagine iron ore project in the Pilbara region of Western Australia, after completing a successful feasibility study.

BC Iron will invest A$43m in the direct shipping ore project, paving the way for the transition to production, the company said.

The feasibility study has been sent to Fortescue Metals Group (FMG), which will form a joint venture with BC Iron to develop the Nullagine project after it has accepted the study findings.

Under a joint venture agreement signed in June 2009, FMG’s subsidiary, The Pilbara Infrastructure, will provide rail haulage, port handling and ship loading facilities to the mine site.

BC Iron is targeting exports of 1.5 million tonnes during the first six months of operations and will ramp-up to a long-term production of five million tonnes per annum.

The company also announced a probable ore reserve of 35.6 million tonnes at 56.9% iron, based on mineral resource estimates carried out by Golder Associates.

First production from the project is targeted for the second quarter of 2010 with three million tonnes a year expected once a heavy haulage road to the nearby railhead has been completed.