Infrastructure & Gas Supply

Unlike traditional hematite iron ore (Direct Shipping Ore, DSO), magnetite requires significant downstream beneficiation before it can be used for steel production.

This processing presents important economic and employment benefits for Australia and will also drive investment in major new infrastructure in regional communities. For example, the Sino Iron project includes a new port (the first in the Pilbara in 40 years), a 450 MW combined cycle gas-fired power station, and a 51 GL water desalination plant.

Additionally, the construction of the 300kvA power line from Eneabba to the Karara minesite as part of the Karara project in Western Australia constitutes a key element of the infrastructure required for the WA State government MidWest Energy Plan (MWEP) to deliver a reliable and efficient 330kvA electricity supply to Geraldton and the greater Mid-West region of Western Australia. The Karara project together with the other proposed MidWest region magnetite projects will ultimately underpin the development of the proposed new Oakajee Port.

In addition to being a potential foundation customer of Oakajee, the Karara project alone represents significant investment in regional infrastructure and utilities including:

  • upgrades to existing port and rail facilities;
  • power line extensions;
  • a 15-year power supply agreement underpining new generation capacity, and
  • a water pipeline.

Securing suitable power and water supply, as well as transport infrastructure, requires careful planning and considerable capital expenditure by MagNet companies.  Gas-powered energy supply, in particular, is crucial in maximising the environmental benefits unique to magnetite in the full steel production cycle. For this reason, CITIC Pacific Mining has financed the construction of a dedicated 450 MW combined cycle gas-fired power station for the Sino Iron project. It is readily acknowledged in Western Australia that there are inadequate supplies of available and affordable domestic gas, forcing many magnetite projects to use power that is substantially coal-generated.

The State and Federal Governments can make an important contribution to the success of the magnetite projects by ensuring domestic gas supply is both reliable and affordable. To this end, MagNet supports the DomGas Alliance in its goal to promote diversity, affordability and security of gas supply for both industry and households in Western Australia.

MagNet notes and supports the commitment of Premier and Minister for State Development, the Hon. Colin Barnett MLA, to continue to affirm (as recently as 2013) the policy for domestic gas reservation made by previous State Governments.

Given that WA is not connected to the National Electricity Grid, many transmission lines still need to be built or upgraded.  Practically all grids within the State could benefit from expansion and capacity upgrade. Magnetite companies are keen to utilise renewable energy sources where possible but this is made difficult where grids are not already in existence.

A more integrated North West Interconnected System (NWIS) would allow major power users to share the benefits of any excess generation capacity and a more stable power supply in the Pilbara and MidWest regions. Better interconnection would also facilitate any new project final investment decision.