AusRAIL, Market Sectors

Hope Downs viable, even with new Port Hedland railway

<p>Plans for a new iron ore mine in Western Australia’s Pilbara region are viable, even if a new independent railway to Port Hedland has to be built.</p> <p>Hope Downs Management Services &#8211 a 50:50 joint venture between Hancock Prospecting and Kumba Resources &#8211 wants to develop a new mine 75 km northwest of Newman to exploit high-value Marra Mamba ore.</p> <p>Hope Downs project director Russell Tipper said the feasibility study study showed the viability of the $1.5 bn iron ore venture, despite the cost of the railway.</p> <p>The company has been trying unsuccessfully for years to get access to BHP Billiton’s Mt Newman Rail Line by building a short rail spur from the Hope Downs mine.</p> <p>It even launched legal action to determine if clauses in BHP Billiton’s state agreement would allow access to the line. It is now awaiting the outcome of that action.</p> <p>Meanwhile, Hope Downs made the feasibility study on the assumption that it would have to build an entirely new 324-km rail line to Port Hedland. </p> <p>The Hope Downs site has iron ore reserves totalling around 400m tonnes. The company wants to produce 5m tonnes of export ore in the first year, increasing to 25m tonnes a year within a five-year period. </p> <p>The feasibility study identified a number of markets for the product, particularly in Asia where Murra Mumba ore is highly sought.</p> <p>Mr Tipper said that once appropriate marketing contracts and funding arrangements are secured and regulatory requirements met, the board could recommend to shareholders that the project should proceed.</p> <p>Subject to approval, construction of the Hope Downs project is expected to start later next year, with first production in early 2006.</p> <br />