Latitude & Longitude (WGS84):	21° 4' 49'' South , 116° 9' 43'' East
Latitude & Longitude (decimal):	-21.08030,116.16192
GeoHash:	G#: qs68566w2
Locality type:	Mine
Köppen climate type:	BWh : Hot deserts climate

Magnetite mine. The scale of this project is eye watering.

An open pit that will be 5.5 kilometres long, 600 metres deep, by 2 kilometres wide, and a 25 year life span. The largest haul trucks in the world at 360 tonnes each. 2 x 400 tonne face shovels capable of loading 5000-5500 tonnes of rock per hour. Four in pit crushers the height of a seven storey building each. Six processing lines making it one of the largest grinding mills in the world. A one kilometre long by 250 metre wide ore stockyard with a 1.4 Mt capacity. A power plant producing enough energy it could power all of Canberra. A desalination plant capable of providing water to a small city. The first greenfield port built in the Pilbara for forty years.

Ore began moving out of the port at Cape Preston early 2014, and is slowly ramping up. The mine is 80 kilometres south-west of Karratha, between the North West Coastal Highway, and the coast, and just east of the lower reaches of the Fortescue River.

The ore being produced is magnetite, the poor cousin of hematite, which is usually shipped out of the Pilbara. Magnetite requires expensive processing to ensure it is suitable for steel making. However, with companies already established in the Pilbara, controlling high grade hematite deposits, new players have looked to magnetite.

In 2006, Chinese state owned Citic bought the mining rights for the Balmoral deposit (then named the George Palmer deposit) from Mineralogy owned by Queensland oligarch Clive Palmer. Citic and Palmer later fell out over a dispute over future royalty payments, and has seen a lengthy court battle. Citic meanwhile employed MCC to undertake construction, also a Chinese state owned company, and planned to employed 100% Chinese labour. The Australian government put a stop to that, causing a cost blow out. The company has used several local firms during the construction process.

Then Citic and MCC fell out over cost overruns. However as both are majority Chinese government owned, there is no looking far as to who ultimately pays. With US $13 billion spent, it is the world's costliest mine. A mere $7 million worth of equipment that has dis-appeared (truck, crane, 4000 tonnes of scaffolding) is minor in comparison. In 2009, the estimated cost of the mine was just over $5 billion.

When Citic bought out its parent company, it was relieved of presenting to the public the financial situation of the mine. This is because only when an entity makes up more than 10% of the company does a report need to be issued. Sino Iron was 33% of Citic's assets. As part of the parent company, it is 1.5%. Magically the problems have dis-appeared.

So is this development good for the ordinary citizens of China and Australia, or not. Well both, which is why it is so contentious.

As both the mining company and construction company are state owned, they have an unlimited source of money. It is doubtful most Chinese have heard of the Sino Iron Ore Mine, been told of the costs, or would have any way of protesting the situation. A private company would have walked away years ago. In fact a private company would never have embarked on the project to begin with. It is China's biggest overseas mining investment.

China's aim is to eventually control the iron ore supply to its steel mills, thereby to a certain degree controlling the price. Once fully operational the mine will flood the market, driving prices lower. However the large iron miners in the Pilbara can hardly complain, doing the same thing to try and bankrupt the small miners in the region. While most are Australian based, the larger ones also have many overseas shareholders.

Recent history has seen an expansion in the number of iron ore mines in the Pilbara, the number of companies involved, an increase in production, and crash in prices. Is the stuff just better left in the ground for the time being? They will still be making steel in one hundred years. Will we still have high grade iron ore deposits at that stage, considering we are not far short of giving the iron ore away at the moment.

The mine will bring royalties, and employs locals (although maybe more than the company had originally planned), at a time when other mining companies are madly shedding jobs as fast as they can.

In a few years no-one will remember the cost of construction. In the longer term mid-tier iron ore miners in the Pilbara should be more concerned about Sino for their survival, than the present production binge by BHP Billiton and Rio Tinto.

Commodity List

This is a list of exploitable or exploited mineral commodities recorded at this locality.

Mineral List

1 valid mineral.

Regional Geology

This geological map and associated information on rock units at or nearby to the coordinates given for this locality is based on relatively small scale geological maps provided by various national Geological Surveys. This does not necessarily represent the complete geology at this locality but it gives a background for the region in which it is found.

Click on geological units on the map for more information. Click here to view full-screen map on Macrostrat.org

Quaternary 0 - 2.588 Ma ID: 921119

colluvium 38491 Age: Pleistocene (0 - 2.588 Ma) Description: Colluvium and/or residual deposits, sheetwash, talus, scree; boulder, gravel, sand; may include minor alluvial or sand plain deposits, local calcrete and reworked laterite Comments: regolith; synthesis of multiple published descriptions Lithology: Regolith Reference: Raymond, O.L., Liu, S., Gallagher, R., Zhang, W., Highet, L.M. Surface Geology of Australia 1:1 million scale dataset 2012 edition. Commonwealth of Australia (Geoscience Australia). [5]

Neoarchean 2500 - 2800 Ma ID: 3186668

Archean sedimentary and volcanic rocks Age: Neoarchean (2500 - 2800 Ma) Stratigraphic Name: Fortescue Group Comments: Pilbara Craton Lithology: Mafic volcanic rocks; shale Reference: Chorlton, L.B. Generalized geology of the world: bedrock domains and major faults in GIS format: a small-scale world geology map with an extended geological attribute database. doi: 10.4095/223767. Geological Survey of Canada, Open File 5529. [154]

Data and map coding provided by Macrostrat.org, used under Creative Commons Attribution 4.0 License

References

External Links