Name and Location
Karara iron-ore project, Australia.

Client
The project is a joint venture (JV) between Gindalbie Metals (47.84%) and Ansteel (52.16%).

Project Description
The project involves the development of an iron-ore mine in the midwest region of Western Australia. The Karara project tenements cover about 150 km² of highly prospective banded iron formation and include the 4-km-long Karara magnetite deposit and surrounding high-grade hematite ore deposits.

The project will be implemented in two stages to build a ten-million-ton-a-year iron-ore producer.

Stage 1 involves the mining of direct shipping hematite ore from Karara to deliver about eight-million tonnes a year of magnetite concentrate and up to three-million tons a year of hematite.

The logistics involve mining on site, followed by road/train haulage along the existing 85 km haul road to Morawa, where a rail siding will be built for loading ore onto rail wagons for cartage on the existing midwest railway, more than 200 km to the Geraldton port.

Stage 2 involves the mining and concentrating of the magnetite deposit at Karara.

The logistics entail the mining of up to 20-million tonnes a year of raw magnetite ore, followed by a concentration on site at Karara to produce eight-million tonnes a year of magnetite concentrate, which will be transported through a 225 km slurry pipeline to the industrial estate at Narngulu, 6 km east of Geraldton.

The latest reserves and resources defined are expected to result in the production of 30-million tonnes of iron-ore a year for a 35-year life-of-mine.

Value
$2.63-billion.

The tailings management contract is valued at A$23-million a year.

Duration
The official opening of the Karara project took place on April 9, 2013.

Latest Developments
The JV partners in the Karara iron-ore project will need to invest a further A$123.6-million into the project to reach nameplate capacity.

A technical review on the project has identified the need for an additional 55-m-diameter tailings thickener, as well as the construction of a second wet tailings storage facility, and the installation of dewatering cyclones after the rougher magnetic separation stage.

The additional debottlenecking work will allow the Karara project to reach its nameplate capacity of 8.8-million tonnes a year.

Gindalbie flagged the need for additional capital at Karara in November last year, after commissioning and ramp-up of the Karara concentrator took longer than expected.

The miner implemented remedial actions as part of the first phase of the debottlenecking, which included upgrading and refurbishing the tailings filters, constructing a temporary wet tailings facility and holding thickener optimisation trials.

The completion of these remedial actions means that the Karara concentrator circuit is capable of production of about 75% of the nameplate capacity at a production rate of 6.6-million tonnes a year.

About A$111.1-million will be spent on further debottlenecking Karara in 2014.

The additional thickener and dewatering cyclones have been approved by the JV partners and the projects will be completed by the end of the calendar year. Design work for the wet tailing storage facility is in progress, and the capital needs for this project will be presented to the JV partners for approval in the June quarter.

The review also identified a medium-term requirement to increase tailings filtration capacity, which would be needed by the time the two tailings dams have been filled. The engineering study will establish the requirements, schedule and cost for this additional failing filter capacity.

Expenditure in 2014 for the additional capacity will be limited to the engineering study.

Key Contracts and Suppliers
Worley Parsons (project management services); Doric (design, supply and installation of Karara construction camp); Bateman and ProMet Engineers (front-end engineering and design); Polysius Australia (supply of four large ball mills and two high-pressure fine-grinding tower mills); Metso Corporation (secondary crushers); FLSmidth (primary crushers); China Development Bank and Bank of China (debt finance); Brierty (constructor of Karara access road and preferred mining contractor); Wearside Construction (iron-ore storage structural and mechanical works at Geraldton port); Aecom (detailed engineering design for Geraldton port); Amec Minproc (construction management services at Karara mine site); BIS Industries (tailings management) and Downer EDI (openpit mining contract).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Bateman, email enquiries@batemanengineering.com.au.
Brierty, tel +61 8 9459 2855, fax +61 8 9459 8202 or email info@brierty.com.au or investor@brierty.com.au.
FLSmidth head of investor relations and corporate communications Pernille Friis Andersen, tel +45 36 18 1887, fax +45 36 16 1922 or email pefa@flsmidth.com or corpir@flsmidth.com.
Gindalbie Metals, tel +61 8 9480 8700, fax +61 8 9480 8799 or email gbg@gindalbie.com.au.
Karara Mining, tel +61 8 6298 1888 or fax +61 8 6298 1099.
Metso Corporation investor relations manager Marja Mäkinen, tel +358 20 484 3211 or email marja.makinen@metso.com; or investor relations assistant Anne-Mari Ylikulppi, tel +358 20 484 3117 or email anne-mari.ylikulppi@metso.com.
Polysius Australia, tel +61 8 9494 7474, fax +61 8 94.