October 2021
Australia has the largest reserves of iron ore, located in the Hamersley Basin of the Pilbara region of Western Australia. The primary haematite ores produced are the dominant iron ores mined and exported. Haematite ores require minimal processing before transport to customers (direct shipping ore or DSO), such as iron ore from BHP, Rio Tinto and FMG.

There are also substantial reserves of magnetite BIFs in Australia. Compared with haematite ores, magnetite BIFs require a considerable beneficiation to upgrade resources into to an iron ore product suitable for steel making. Magnetite mining is an emerging industry in Australia, with large deposits being developed in the Pilbara and Mid West regions of Western Australia as well as in South Australia and Tasmania.


What is Magnetite?

Magnetite (formula Fe3O4, Fe content 72% by weight) typically occurs as a primary (unweathered) mineral, associated with silica as chert, in BIFs forming ore deposits with grades between 20-40% Fe. Primary unweathered BIFs are abundant in the rock record and are the basis of iron ore industries in China, Russia and Ukraine. Magnetite ores usually require beneficiation (upgrading) to be converted into a higher grade concentrate product to be viable for commercial use. This concentrate product subsequently becomes feedstock for sinter or pellets, depending on grain size. The magnetic properties of magnetite allow use of highly efficient magnetic separation techniques to produce iron concentrates. However due to the fine grainsize of the magnetite energy-intensive grinding is required to liberate the magnetite from associated gangue minerals. Different ore bodies require different grind sizes (between 30 and 100 microns) to allow adequate concentration of the iron content.


Magnetite Mines in Operations


Sino is the largest magnetite mine in Australia, operated by CITIC Limited. The mine is located 100km southwest of Karratha in Western Australia. The project integrates the mine, concentrator, power station, desalination plant and a 30km slurry pipeline to the dedicated port at Cape Preston.

CITIC Limited has a right to mine up to 6Bt of magnetite iron ore from the George Palmer Deposit. Raw magnetite iron ore from Sino has a low iron content with grading from 15% to 32%. The iron grade of the magnetite concentrate for the life –of mine is likely to be around 66% Fe with minimal phosphorous or alumina. As the raw ore was processed, CITIC Limited built a desalination plant and power station on site to support the processing facilities.

CITIC's Sino Iron project is China's biggest single investment in Australia at an estimated capital expenditure of US$12bn, 300% higher than the original budget. The project achieved first concentrate production in late 2012. ~21Mt of magnetite concentrate was produced in 2020. CITIC Limited submitted a proposal in December 2020 to the West Australian Environmental Protection Agency to extend the life of the operation in maintaining a production rate of 24Mtpa.

The concentrate is sent to CITIC's special steel plants of Jiangyin Xingcheng and Xin Yegang with a combined annual capacity of 9Mtpa. CITIC also sells iron ore to other Chinese mills.

Savage River

Grange Resources’ Savage River mine is located in rugged terrain 100km by road southwest from Burnie, Tasmania. The current operation produces 2.5Mtpa of 67% Fe concentrate which is transported 83km by pipeline to Grange's Port Latta pellet plant, which produces 2.5Mtpa of 66.5% Fe BF pellet.

The Savage River magnetite deposit is at the eastern margin of the Proterozoic Arthur Metamorphic Complex in northwestern Tasmania. Magnetite ore includes pyritic, serpentinite and talc-carbonate types. The current mineral resource is 497.5Mt (Fe content of 45.8%) including an ore reserve of 107.7Mt (Fe content of 47.2%) sufficient for a mine life beyond 2036. Existing offtake agreements of 1Mtpa until 2022 to Shagang are at fair market prices.

Middleback Ranges - Magnetite

The South Middleback Ranges Magnetite (Iron Magnet) mine is owned by SIMEC, the shipping, mining, energy, industry and commodities division of the GFG Alliance. It lies on the southern end of the Middleback Ranges, on the northeast Eyre Peninsula, South Australia. Iron Magnet is approximately 50km southwest of Whyalla. Iron Magnet was commissioned in June 2007 with a mining capacity of 4.6Mtpa and concentrate production at 1.57Mtpa. The mine has expanded to produce 5Mtpa magnetite ROM iron to produce ~1.8Mtpa pellet and supply Whyalla steelworks. The balance will be exported to Asian countries.


The Coming Projects

Iron Bridge

The Iron Bridge iron ore project is located in the Pilbara region of Western Australia, approximately 100km south of Port Hedland and 25km east of FMG's Port Hedland-Newman railway line. The project is operated as a joint venture between Fortescue Metals Group (60.72%), Baosteel (8.28%) and Formosa Plastics Group (31%). The project includes three resource areas at West Star, North Star and Glacier Valley. It will produce magnetite concentrate for export through Port Hedland.

The joint venture completed construction of Stage 1 in March 2015, which will produce 1.5Mtpa of +64% Fe blast furnace (BF) pellet feed from the North Star deposit. Stage 2 will expand the project to 22Mtpa of 67% BF feed. The capital expenditure is expected to reach US$3.3-3.5bn. Project development started in 2019 and first production is planned for December 2022.

Central Eyre

Iron Road’s Central Eyre project is located on the Eyre Peninsula of South Australia, approximately 30km southeast of the regional centre of Wundinna. In 2019, Iron Road revised a new mine plan that would feed 81.7Mtpa ROM ore to produce 12Mtpa of concentrate with Fe grade of 66.3%. The current mineral resource is 4,510Mt (Fe content of 16%) including an ore reserve of 3,681Mt (Fe content of 15.07%).

In January 2021, Iron Road announced that the development planning for a green manufacturing precinct at Cape Hardy by The Hydrogen Utility (H2U) is to commence and will integrate an iron ore ‘green pellet’ plant fuelled by renewable energy, using high grade iron concentrate from the Central Eyre Iron Project (CEIP). The target of pellet production output will be ~1Mtpa to 2Mtpa.


Compared with haematite ore mined in Australia, magnetite needs further beneficiation to upgrade resources into concentrate. Therefore, the operating costs are higher than those of haematite ore mines. Some mines integrate pellet plants to further process the ore. The magnetite pellets contain lower levels of impurities, particularly of phosphorous, sulphur and aluminium. These pellets are premium products that attract higher prices from steel makers, offsetting the higher costs of their production.