Quarrying & Mining Magazine

Huge ironsands expansion

A major mining expansion is underway on Waikato’s remote west coast with New Zealand Steel to lift ironsands exports. LINDSAY CLARK explains.

Theo Annandale, project manager for the Taharoa mining expansion, told the AusIMM mining conference in Hamilton that exports of ironsand concentrate will grow from 1.3 million tonnes this year to four million tonnes a year by 2016.

New Zealand Steel, a subsidiary of Australian-based Bluescope Steel, is investing $80 million in new mining equipment and three specially-built bulk ironsand ships to cater for the Taharoa titanomagnetite concentrate mine trade. The first of this fleet is scheduled to arrive in late 2015.

The company’s resource recognition programme carried out in 2010 allowed for a redesign of its Taharoa mining operation just south of Kawhia Harbour. The plan is to optimise the total resource and maximise export volumes as a model for development of any other ironsand deposits by NZ Steel, Annandale says.

Of the three geographical sections of the Taharoa deposit, the southern section was worked out by 2001. The central section is currently being mined by NZ Steel and the northern section towards Kawhia Harbour remains to be mined. Annandale says the first of three development stages to the expansion at Taharoa has now been completed.

The second stage of development at Taharoa will involve redefining the ironsand resource to increase production to 2.7 million tonnes of concentrate a year. In addition to the previous wet mining from a floating dredge, dry mining techniques will be used because of changes in the geology.

The transport of ironsand will still be by slurry concentrate pumped out to moored ore carriers at the “port” of Taharoa, which consists of single buoy mooring three kilometres offshore connected by pipeline to the mine plant onshore. This mooring was moved out a further 500 metres in 2012 to allow a deeper berthing for bigger iron ore ships up to 175,000 dead weight tonnes.

A new dedicated vessel the Taharoa Destiny, the only ship in the world capable of loading and dewatering a slurry cargo according to Bluescope Steel, began operation in May 2012.

The keel for a second ironsand concentrate ship is being laid down now and should arrive at Taharoa about April next year.

Stage three of the Taharoa project will be more complex as about 40 percent of the northern ironsand resource lies below mean sea level and below the level of Lake Taharoa, which lies inland from the ironsand deposits. A suitable dredge will be required to extract this deposit and resource definition indicates lower grades of titanomagnetite will be encountered.

An Australian perspective

Commenting on the expansion, BlueScope’s managing director and CEO, Paul O’Malley, says, “With a low cost of extraction, our ironsands operations are a valuable part of BlueScope’s business portfolio – making an excellent contribution to earnings from exports and providing low cost iron unit feed to New Zealand steelmaking.”

It has only been in the last few years that the Australian company has realised the great economic advantages of having a steel mill outside Auckland that has its ironsand ore resource literally down the road (actually just down the pipeline at Waikato North Heads), and with its coal coming from just a little further away at Huntly.

Titanomagnetite ironsands are common geologically in different parts of the world, but this country has one of the world’s largest and easily accessible resources on the North Island west coast.

The Reuters news agency reports that the big ore producers are flooding the world with hundreds of millions of tonnes of cheaply mined ore, driving down prices by almost a third this year to under $90 a tonne. At the same time smaller higher-cost, less competitive suppliers from China, Iran, Australia, Canada and other parts of the world are reported to be in financial trouble.

With higher-cost and less competitive suppliers in trouble, it is predicted by mineral analysts that, by 2015, the biggest iron ore producers will account for over 80 percent of world iron ore trade.

How can ironsands exports from New Zealand survive in this economic climate?

The answer really is our naturally low costs of production and low development costs.

Bluescope says the infrastructure cost of the Taharoa upgrade will be $A30 a tonne and this is less than a fifth of the cost of an equivalent brownfields/greenfields iron ore development in West Australia – between A$150 and A$190 a tonne.

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