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IRON ORE
Central Eyre a national priority
Iron Road Ltd’s Central Eyre iron project
in South Australia has never looked bet-
ter, according to managing director An-
drew Stocks.
Such a statement might seem strange
given some forecasters are predicting
the iron ore price will drop back below
$US50/t next year.
But when you strip away the uncontrol-
lable market dynamics and take a closer
look at Iron Road’s list of achievements
through 2016, Stocks makes a compel-
ling case for the company he founded
almost a decade ago.
Iron Road’s proposed rail and port fa-
cilities – servicing not only the new Cen-
tral Eyre mine but other industries on the
Eyre Peninsula – was recently declared
a “priority project” by Infrastructure Aus- would be revealed before 2016 comes to
tralia (IA).
The national government body’s as-
sessment looks at whether a project
would have public benefits if commer-
cially viable, with IA noting the benefits
of the infrastructure to SA and the rest of
the country outweighed the high devel-
opment and environmental costs.
“There are only 10 priority projects
across the nation and the list is made
up of urban congestion projects and na-
tional connectivity projects and one lone-
some opportunity for growth – the Iron
Road project,” Stocks told Paydirt.
“We’ve been working on the project for
eight years and I personally have been
working on the project for nine years. It
is a good feeling to know
that should we build this
project, where we’re not
only building a mine in
a regional area that will
create new business
opportunities and em-
ployment opportunities,
but build much-needed
infrastructure that will
most likely see new
businesses start up as a
result. It’s never looked
better.”
IA’s priority tag is the
latest in a series of posi-
tive news flow for the company over the
past eight months, including a strategic
co-operation agreement with China Rail-
way Group.
A successful $9.56 million capital rais-
ing and shaving a further $US2/t off pro-
posed operating costs for Central Eyre
were other key milestones for Iron Road
during the same period.
PAGE 64 NOVEMBER 2016 AUSTRALIA’S PAYDIRT
The infrastructure arm of Iron Road’s Central Eyre iron project has been
declared a project of national priority by Infrastructure Australia
Iron Road also confirmed in early
March it had signed a MoU with Emerald
Grain, a wholly owned subsidiary of Jap-
anese conglomerate Sumitomo Corp,
to develop a grain distribution and sup-
ply network using the iron ore hopeful’s
planned rail and port facilities.
Stocks hinted more news relating to
the infrastructure side of the business
a close.
“Later this year, with Regional Devel-
opment Australia, we’ll be jointly calling
for EOI to use excess capacity in the rail they understand we’re genuine, so when
and port,” Stocks said.
“The introduction of competition into
the grain industry for the
first time in a long time
on the Eyre Peninsula
will be a great community
dividend. And the farmers
need not do anything to
receive that.”
Recent optimisation
work on the mine design
and schedule suggested
the shape of the Central
Eyre geology was best
suited to in-pit crushing
Andrew Stocks and conveying. Iron Road
is currently reviewing the
financial metrics of the
project and Stocks is expecting to cut the
$US4 billion capex “a fair way”.
“We’ve done a lot of work to eliminate
the tails dam from the mine design and
now we’re very much focused on working
our way through the approvals process,”
Stocks said.
“We’re expecting to get the first round
of approvals by the end of the year or,
at the latest, early next year. Then we’re
very much looking forward to moving into
the next phase of work with China Rail-
way.”
According to Stocks, China Railway
identified the level of study work, the
quality of the Central Eyre product and
the overall infrastructure solution as
the key reasons for partnering with Iron
Road over others.
“These three ticks are very important,”
Stocks said. “When you understand your
customers and you understand your pro-
ject and you’ve made that journey, then
you become more attractive.”
Iron Road’s stock has held relatively
firm around 13c/share over the past two
years while the iron ore price has gone
through a period of instability, suggesting
to Stocks there are enough believers in
his company’s vision.
“People do believe in what we’re doing,
we say something we mean it, but I also
think there’s some healthy scepticism out
there,” he said.
“We’re trying to build a very large pro-
ject and people do say to me from time to
time, ‘Andrew, iron ore prices are down,
why are you doing this?’. Well, the iron
ore price is down somewhat, but it’s not
the lowest it’s ever been and it’s not near-
ly as far down as what a lot of people said
it would go, so surely now is the time to
do the studies.
“We have a 2020 problem, not a 2016
problem. We just try to keep focused on
the bigger picture, keep an eye on what’s
going on and making sure we’re doing
the right thing.”
– Michael Washbourne