Most of Australia’s traditional iron ore projects mine ore deposits that are enriched naturally and contain high levels of iron. The Pilbara region is rich in such hematite ore, known also as “direct shipping ore” (DSO). DSO passes through a simple crushing, screening and blending process (beneficiation) before it is shipped overseas for steel production. Direct shipping ores, when mined, typically have iron (Fe) content of between 56% Fe and 64% Fe. The predominant minerals in DSO are usually the ferric iron oxides hematite (Fe2O3), goethite (FeO(OH) and/or limonite (FeO(OH).nH2O)
By comparison, magnetite ore typically has a much lower iron content when mined of between 25% and 40% Fe and in this form is unsuitable for steel making. The main iron mineral in magnetite ore is the ferrous iron oxide magnetite (Fe3O4). Magnetite ore requires complex processing to separate magnetite minerals from other minerals in the ore to produce an almost pure magnetite concentrate with an iron content of between 68% Fe and 70% Fe that is highly sought after by steel makers.
The advantages of Magnetite
Magnetite ore is of little value in its raw state, but it offers considerable advantages in its concentrated form. These include providing a viable iron-making commodity for premium quality steel production (see Magnetite and the Australian Iron Ore Industry below) and releasing less carbon emissions in steel production (see Magnetite and the Environment).
As it develops, the magnetite industry promises to create jobs for more Australians through onshore value-adding processing. In addition, the higher price fetched by premium quality steel produced from magnetite concentrate can offset the costs associated with beneficiation.
Essentially, the magnetite sector offers a win-win for both producers and buyers, while also delivering benefits to both Australia’s economy and the global environment.
Magnetite and the Australian Iron Ore Industry
Australia has earned a global reputation for producing a steady supply of quality iron ore. The latest data ranks Australia as the world’s second largest iron ore producer behind China. Strong global demand for steel has seen magnetite ore’s increased share of Australia’s Economic Demonstrated Resources (EDR) of iron ore increase to more than a third of the nation’s total (9.5Gt of a total 28Gt). Like traditional hematite iron ore deposits, the majority of these magnetite resources is located in Western Australia, although there are also substantial magnetite resources and prospective projects in South Australia, Tasmania, New South Wales and Queensland. (See Geoscience Australia, Australia’s Identified Mineral Resources 2010)
Industry trends, however, point to an increasing role for Australian magnetite in global iron ore trade. Furthermore, in light of a gradual decline in Pilbara hematite ore quality over the medium to long-term, magnetite offers a viable alternative that promises to cement Australia’s position as a key global supplier of this crucial steel-making commodity. For example, the average iron content of DSO reserves reported by major Pilbara producers in 2010 ranged between 58.5 – 61.2%, compared to an average estimated iron content of 68% in concentrate from planned magnetite projects.
Declining Quality of Hematite/DSO iron ore
Source: Asia Iron Ltd
The processing undertaken by the magnetite sector is well-suited to global rising demand for sophisticated steel products. The diagram below highlights the value-adding processing stages required to prepare magnetite ore for export. Apart from producing a viable, high-quality product for overseas steel-making requirements, these stages also represent job opportunities in regional communities experiencing economic downturn. In the case of WA, many planned magnetite projects are located in drought-stricken traditional pastoral and agricultural regions. Emerging magnetite projects present a viable, long-term alternative source of income and development incentives.
Magnetite beneficiation diagram (click image for larger version)
MagNet members, primarily in WA, estimate they will create some 9 000 direct jobs in the construction of four key projects and create 2 500 direct permanent jobs over the life of the operations. Experts Deloitte Access Economics have assessed the economic credentials of developing the Australian magnetite industry MagNet member company projects. In the report, they estimate CITIC Pacific Mining’s Sino Iron project alone would contribute more economic benefit and create more jobs in Australia than a benchmark DSO project.