JOHANNESBURG (miningweekly.com) – ASX-listed Flinders Mines has signed an alliance agreement with the Balla Balla joint venture (JV), comprising subsidiaries of Rutila Resources and Todd Minerals, securing Flinders’ access to the JV’s proposed port and rail infrastructure facilities for the Pilbara Iron Ore Project (PIOP) in the Hamersley Ranges of Western Australia.

Flinders on Wednesday described the alliance agreement as a “game changer” that would allow it to develop the high quality PIOP, as it would now be the foundation user of the surplus capacity of the Balla Balla Mine Export Facility (BBMEF).

“This is an historic moment for Flinders and marks the point in time where we can realistically expect to develop our PIOP with a strong path to market,” Flinders executive chairperson Robert Kennedy commented, adding the arrangement with the JV broke the deadlock that the company had faced in having stranded high-quality assets without access to rail and port services.

Flinders and the JV had agreed on commercial terms for access, which, following completion of bankable mining, rail and port studies, would result in the potential start of mining from the PIOP by 2017.

In terms of the agreement Flinders would pay a direct operating cost recovery fee on each tonne handled through the BBMEF infrastructure facilities and pay a A$25/t service charge.

Meanwhile, the JV would pay Flinders a A$5/t foundation user rebate for the first 20-million-tonnes-a-year commitment with a further rebate applied for additional ore transported.

Flinders would also pay the JV a price participation fee of 30% of its revenue derived from ore sales in excess of A$60/t.

Further, both groups would fund their own costs in relation to the completion of the bankable feasibility study (BFS) and would form a working committee with respect to this process to ensure consistency between the processes.

The Flinders PIOP BFS would assume an initial yearly production rate of about 25-million tonnes a year with the potential for production to increase in future years.

“The signing of this alliance agreement is an innovative solution among junior mining companies to unlock efficient infrastructure solutions to enable independent development of significant iron-ore mines in the Pilbara. The innovative solution is a result of committed and positive negotiations with the Ngarluma Aboriginal Corporation and the appropriate state authorities.

“I am proud that we have achieved this breakthrough in a short timeframe and that this will enable job creation and continue the development of the Western Australian mining industry,” Rutila executive chairperson Nicholas Curtis said.