South ’s Magnetite Strategy Making our State’s magnetite the world’s choice for steelmaking

www.minerals.dpc.sa.gov.au/magnetitestrategy “Unlocking ’s magnetite resources represents an untapped economic opportunity with significant energy efficiencies for steelmakers. Processed magnetite is a high- grade, concentrated product that requires less energy for steelmaking. In a carbon-constrained world, South Australia’s magnetite products will assist the global steel to reduce their costs and their emissions.”

Hon Tom Koutsantonis MP Minister for Mineral Resources and Energy

Images front cover: Courtesy of Liberty OneSteel, SIMEC and Magnetite Mines Limited Image this page: Magnetite processing , Middleback Ranges - SIMEC Mining

2SOUTH AUSTRALIA’S MAGNETITESOUTH STRATEGY AUSTRALIA’S MAGNETITE STRATEGY Minister’s foreword 2 Contents Chair’s foreword 3 Magnetite explained 6

Why a Magnetite Strategy for South Australia? 8

South Australia’s untapped potential 12

China’s flight to quality 14

Meeting the supply chain challenges 16 Our Energy Plan 16 Water for Resources 16 Transport and utilities infrastructure 16

Supporting South Australia’s steel industry 17

Magnetite Strategy Themes 20 Theme 1 – Establish South Australia as a leading global supplier of magnetite products 20 Theme 2 – Engage with stakeholders and industry partners 21 Theme 3 – Forge private-public partnerships to build transformational, bulk-commodity export infrastructure within a multi-user framework 22 Theme 4 – Support a strong and sustainable Australian steel industry 23

Measuring our success 24

Acknowledgements 28

Glossary 31

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 1 The South Australian Minister’s has a history, landscape and foreword culture rich in iron.

In the late 19th century, became the South Australia is endowed with more than By planning now to meet international demand birthplace of mining in Australia. Ore sourced 14 billion tonnes of magnetite resources. This equates from steelmakers for low-cost, high-quality, energy- from South Australia’s Middleback Ranges was the to 44 per cent of our nation’s identified magnetite efficient feedstock derived from magnetite, South foundation of our nation’s steelmaking industry. resources. Our State’s advanced magnetite projects Australia has taken the first step on the path towards South Australia has manufactured quality steel are located throughout the northern areas of our attracting $10 billion of committed investment by products for nearly 80 years through an integrated State, from south of to Eyre Peninsula 2022 and boosting production to 50 million tonnes supply chain backed by extraordinary technical and through the Mid North to our border with of magnetite products per year by 2030. expertise. . Using South Australian magnetite to make high- Achieving the ambitious vision of making South quality steel in Australia, to Australian Standards, Australia’s magnetite the world’s choice for to build Australia’s infrastructure, simply makes steelmaking will create and sustain thousands of sense. It creates jobs, sustains communities and jobs across the mining supply chain, particularly for Tom Koutsantonis MP supports a critical industry that maintains our nation’s residents and businesses in regional communities. Minister for Mineral Resources and Energy sovereignty. The inherent quality of Australian-made Investment in these long-life mines creates business steel will result in a legacy of superior infrastructure opportunities for Traditional Owners, boosts our for future generations. export earnings, and provides a stream of royalty revenue to fund government services such as our schools and hospitals.

2 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Magnetite is an increasingly into a high-grade, low-impurity feedstock for high-grade steel with benefits of energy efficiency important feedstock for high- resulting in reduced costs and emissions for quality steelmaking. Steel is steelmakers. the most used metal on earth, By capitalising on the emerging global demand for globally utilised at more than higher-grade iron products, South Australia has an 20 times the rate of all other opportunity to position itself as a leading global magnetite-producing region. metals combined. With the South Australia’s Magnetite Strategy will foster world’s population projected collaboration between miners, mining services, to grow by 50 per cent within steelmakers, researchers, government and the next 100 years, long-term communities to develop the industry through new Chair’s demand for steel is assured. partnerships, innovation and new technologies. The Strategy will present South Australia’s magnetite opportunity to a global audience and The aim of South Australia’s Magnetite Strategy is encourage the investment required to unlock our to encourage a larger portion of that steel to be mineral and magnetite wealth for the benefit of foreword produced using magnetite mined in this State. all South . High-grade steel products demand high-quality iron inputs. Global Direct Shipping Ore (DSO) continues to decline with a corresponding rise in impurities. Unlike DSO, which is shipped unrefined to steelmakers, magnetite generally requires Dr Ted Tyne processing to make it suitable for use in blast Chair furnaces and direct reduction steelmaking plants. South Australian Magnetite Strategy This beneficiation process produces a concentrate Steering Committee that transforms South Australia’s magnetite ores

Middleback Ranges mining - SIMEC Mining

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 3 Cape vessel transhipping operations near , Upper , South Australia - SIMEC Infrastructure Magnetite Strategy VISION By 2030, South Australia will be a leading global supplier of quality magnetite products for steelmaking. OBJECTIVE To secure $10 billion of combined investment by 2022 to unlock magnetite resources and increase South Australia’s magnetite production to 50 million tonnes per annum by 2030.

‘Making our State’s magnetite the world’s choice for steelmaking’

4 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Action Themes

Establish South Australia as Engage with stakeholders a leading global supplier of and industry partners 1 magnetite products 2

Forge private-public partnerships Support a strong and to build transformational bulk- sustainable Australian commodity infrastructure within steel industry 3 a multi-user framework 4

Caterpillar dump truck at work on CU-River Australia’s Cairn Hill mine near Coober Pedy - Cu-River Mining

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 5 Magnetite explained

Iron ore is a mixture of chemical compounds The energy input requirement is commensurate with of iron (Fe) and other minerals. the level of crushing and grinding. The chemical compounds of iron ore suitable for South Australia’s magnetite ore is characteristically steelmaking are essentially ferric oxides – a mixture soft (low hardness) with large grain sizes in of Fe with oxygen. comparison with magnetite ore from other identified The most commonly used iron-bearing minerals are global magnetite regions. magnetite and haematite. The magnetite concentrate that can be produced The region in is rich in from South Australian magnetite is a high-grade high-grade, predominantly haematite ore, known product to greater than 65 per cent Fe with low also as Direct Shipping Ore (DSO). DSO passes impurities that is highly sought after by steelmakers through a simple crushing, screening (milling) and to increase productivity, provide efficiencies and blending process before it is shipped overseas for reduce emissions. use in steel production. DSO, when mined, typically Global steel production is heavily reliant on . has iron content of between 56 per cent Fe and Almost 70 per cent of the steel manufactured 65 per cent Fe. globally uses coal. Magnetite concentrate is Magnetite ore generally has an iron content of less exothermic, releasing heat during processes for than 40 per cent Fe and is therefore unsuitable for steelmaking, requiring less external energy inputs steelmaking in its natural form. As its name implies, (e.g. coal). the iron in magnetite is magnetic and therefore can Steelmakers seek efficiencies to reduce, manage and be separated from waste material by the application control emissions from the steelmaking process. The of a magnetic field. use of magnetite concentrate in place of haematite can reduce the emissions intensity by as much as Core sample of magnetite-rich siltstone Magnetite grain size and its degree of integration from Magnetite Mines’ Mawson Iron Project with the host rock determines the grind size to 30 per cent in the overall steelmaking process. - Magnetite Mines Limited which the ore must be crushed and ground to enable effective magnetic separation.

6 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Major ore producing regions SOUTH Primarily haematite Primarily magnetite AUSTRALIA Source: US Geological Survey (2016) 92

2015 Global iron ore production 583 Production, Global iron Haematite Mt (dry) Magnetite per year 1404 ore producers Mixed Data: CRU

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 7 Why a Magnetite Strategy for South Australia?

More than 90 per cent of South Australia’s Unique mineralogical characteristics consisting of In the case of sinter and blast furnace pellet identified iron ore resource is magnetite. relatively soft ore and/or large grain sizes define applications, magnetite concentrates will increasingly The Magnetite Strategy encourages government to much of South Australia’s magnetite resulting in a be needed to displace China’s domestic concentrates work with industry and other stakeholders to grow concentrate that has comparatively lower input costs, as reserves are depleted and operations are an emerging sector and create jobs and economic higher iron grade and lower levels of deleterious closed due to uncompetitive costs and increasing prosperity for South Australians. impurities such as alumina, silica, phosphorus and environmental regulation. An opportunity exists for sulphur. South Australia’s magnetite resources South Australia’s magnetite products to meet this Direct Shipping Ore reserves are declining, coupled projects benefit from having a highly sought after expected shortfall. with increasing levels of deleterious impurities which combination of hardness, integration with host rock Whilst DSO currently dominates global, seaborne iron increases steelmaking costs. This indicates reserve and grain size to be globally competitive. depletion of easily accessible, cheaply extracted DSO. ore trade, the use of magnetite concentrates in sinter Global demand is increasing for high-grade, low Further processing of magnetite concentrate can feed blends and pellet feed is widespread. Chinese impurity feedstock for steelmakers. produce sinter or pellets that can be fed directly into steel mills are receptive to magnetite products blast furnaces and electric arc furnaces, including supplied from foreign sources. In 2015, Geoscience Australia reported that direct reduction iron (DRI) steelmaking plants. Pellets The regions of East Asia and Middle East and North magnetite represents 44 per cent of our nation’s and concentrates are premium products that attract Africa (MENA) have a well-established, low-carbon “Economic Demonstrated Resource” of iron resource. higher prices from steelmakers. Coincidentally, South Australia’s share of our nation’s emitting DRI steelmaking industry and are therefore identified magnetite resources also equates to The magnetite products that are expected to be in amenable to receiving magnetite concentrate from around 44 per cent. demand during the next five to 10 years include: overseas suppliers. • high-grade concentrates for use in sinter blends Magnetite ores require initial crushing and screening Energy constitutes a significant portion of the cost like DSO, but then undergo successive stages of • high-grade concentrates for blast furnace pellet of steel production. Thus, the steelmaking industry is additional processing to produce a magnetite feed blends, and one of the largest consumers of coal on the planet. concentrate or pellets. • very high-grade concentrates (> 67 per cent Fe, For every tonne of steel produced, around two and < 3 per cent silica/alumina) for use as feed tonnes of greenhouse gases are emitted. stock for direct reduction pellet production.

8 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Magnetite has low external fuel requirements an international reputation as a reliable supplier of during induration as it is exothermic, releasing latent mineral resources. South Australia is building a global energy in the form of heat as it oxidises during reputation as a jurisdiction that embraces innovation the steelmaking process. Resulting improvements in the development of its mineral resource, energy in energy efficiency in steel production reduce and infrastructure assets. production costs, increase productivity, improve Through international engagement strategies, competitiveness and leave a smaller environmental South Australia continues to build strong links with footprint for steelmakers. China, India, South East Asia, North Asia and the As the expectation of cleaner, greener steel MENA region. These links will complement the production becomes further embedded in the implementation of the Magnetite Strategy. global narrative, South Australia’s magnetite products The Magnetite Strategy will accelerate the offer a viable alternative to DSO. development of magnetite ore bodies and enable South Australia has a long history of stable, South Australia to build its reputation as a preferred supportive government and a modern, regulatory supplier of high-grade, low-impurity, value-added framework that provides certainty for investors. magnetite products to the global steel industry. South Australia is close to Asian markets and has

Magnetite processing plant, Middleback Ranges - SIMEC Mining

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 9 Magnetite mining in South Australia

in the Middleback Ranges 3 APPROVED IRON is the first commercial MAGNETITE MINING KNOB iron ore mine in Australia PROJECTS IN Magnet Project Cairn Hill Central Eyre SOUTH AUSTRALIA (Middleback Ranges) Project Iron Project

THE USE OF MAGNETITE REDUCES $10 GREENHOUSE BILLION 1 MILLION T ESTIMATED TOTAL DIRECT JOBS EMISSIONS The amount of committed DURING THE STEEL investment required by 2022 1400 ongoing OF STEEL MAKING PROCESS BY to enable production targets produced using magnetite to be met. construction pellets in South Australia AS MUCH AS 30% VS 5000 THE USE OF HAEMATITE.

APPROXIMATE IDENTIFIED MAGNETITE RESOURCES BY STATE/TERRITORY

% With 44% of the nation’s 44 magnetite resources, South % % Australia has the opportunity to resource (NSW)resource 54 % 1

including Hawsons including Hawsons 1 South Australia produce more than 13% of 13% National 74% National 13% National Western Australia Western

Northern Territory Australia’s magnetite products. production production production

10 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Current November 2017 The global demand for magnetite

Global urban population GLOBAL POPULATION GROWTH RATE DIAGRAM growth drives demand for steel, particularly as nations 80 industrialise and materials are needed to develop and 70 expand cities. 60 50 40 30 World urban population, annual growth rate 20 Annual urban growth urban Annual million people/annum China South East Asia 10 Africa Latin America 0 India Rest of world 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Other Asia Source: United Nations (2014) World Urbanisation Prospects: Year The 2014 Revision

WORLD STEEL PRODUCTION IS PROJECTED TO INCREASE BY 50% OR 500 MILLION 50 3 MILLION TONNES MILLION TONNES TONNES by 2030 The amount of magnetite aimed to be The amount of magnetite produced produced in South Australia by 2030 in South Australia in 2016 INCREASING DEMAND INCREASING

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 11 South Australia’s untapped potential

From a national perspective, future expected to employ around 2,000 people during The cross-border initiative recognises the untapped development of Australia’s known magnetite construction and 750 during operation. potential of the area and provides a foundation for industry is estimated to add $4.5 billion seeking federal and State funding opportunities for to Australia’s GDP a year and increase Cu-River Mining’s Cairn Hill has been approved combined, strategic infrastructure investment. employment by an average 4,440 FTE a year to to expand its mining operation initially targeting 2034 (Deloitte Access Economics, 2011). 3Mtpa production. The Magnetite Strategy’s success will be measured by the rate of development and investment in our The Magnetite Strategy aims for South Australia to Internal South modelling of magnetite projects, the level of collaboration within seize a significant share of that untapped economic the economic impacts of a typical 6Mtpa magnetite the industry to facilitate infrastructure development, and employment growth potential. project with a 12-year mine life beginning in and the level of support from stakeholders, including 2018 indicate it would provide an estimated GSP South Australia is already home to two magnetite industry, communities, research organisations, contribution of $700 million a year, and an annual producers: SIMEC Mining (part of the GFG Alliance) suppliers and government, to deliver on the vision average of 3,520 direct and indirect Full Time and Cu-River Mining Australia. There are other and objectives. magnetite projects proposed for development that Equivalent (FTE) jobs supported for the life of require an estimated $15 billion in investment. the project. The development of associated supply chain infrastructure and support services will provide The Braemar Iron Formation straddles the South South Australia’s most advanced greenfield capacity and capability to regional economies and Australia and New South Wales border and contains magnetite project is the $4.5 billion Central Eyre Iron benefit other exporters, including the agribusiness several magnetite projects in the design and Project on the Eyre Peninsula. As potentially sector. Australia’s largest magnetite mine, the 21.5Mtpa planning stage of development. Projects include project is located near Wudinna. The project involves the Mawson Iron Project (incorporating Olary and constructing a 148-kilometre rail line to an approved Razorback) and the Hawsons Iron Project. Hawsons deep-water port at Cape Hardy near Tumby Bay. A Iron Project is situated in New South Wales on the mining lease and development authorisations have border of the two States. been granted by the State Government. In 2013, the South Australian and New South Pending achievement of financial close, the Central Wales governments signed a Memorandum of Eyre Iron Project is expected to contribute an average Understanding (MoU) formalising a partnership of $2.7 billion per year to Gross State Product (GSP) aimed at maximising investment and economic over its 25-year project lifecycle. The project is development in mineral resources near the shared border.

12 SOUTH AUSTRALIA’S MAGNETITE STRATEGY MAGNETITE PRODUCTION FLOW CHART

Crushing and Mining grinding Concentration Filtration Pellet plant Stockpile and shipping

Pebble crusher Primary Secondary classifying Slurry Concentrate Filter cake Magnetite Ore barges Autogenous classifying cyclone pipeline launder storage bin pellet and grinding mill cyclone concentrate Magnetite stockpiles Open Primary Coarse Rough Finishing thickener Slurry tank Balling Grate kiln Trans-shipment Bulk carrier mine crusher ore magnetic magnetic drum pelletiser Conveyor loading barge pit pile separator separator Concentrate pump

Classifying Regrind Tailing Filter screen ball mill thickener Tailing dam press Binder bin

POTENTIAL VALUE-ADD IN SOUTH AUSTRALIA

Magnetite ore - SIMEC Mining

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 13 Whyalla Steelworks long product line - Liberty OneSteel

China’s fl ight to quality

China, the largest global producer, consumer quality between high- and low-grade iron ore and importer of iron ore, is in the process products. This is resulting in what could be a of restructuring its steelmaking industry to structural shift in the price gap between high- reduce pollution, cut excess steelmaking and low-grade iron ore products. capacity and improve efficiency and safety. China’s shift towards higher-quality feedstock Operational efficiency in steelmaking requires the presents an opportunity for South Australia to use of higher-quality feedstock. Quality higher- become a leading global supplier of magnetite grade, lower-impurity feedstock produces more products to China’s steelmaking sector. steel for each tonne used, with the added benefit of reducing steelmaking costs and emissions. China’s government-led initiative of reducing emissions from low-tech steelmaking practices has led to the escalation of price differentials for

14 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Iron ore price premium

$260 $22 $240 $20 $220 $18 $200 $16 $180 $14 $160 $12 $140 $10 $120 $8 $100 $6 $80 $4 $60 $2 65% Fe price dry Fe 65% – US$/ tonne $40 $0 Extra Premium tonne US$/dry $20 -$2 Extra high $0 -$4 grade premium 2009 price for high- 2011 Qtr3 2011 Qtr1 2011 Qtr4 2011 Qtr2 2017 Qtr1 2012 Qtr3 2017 Qtr4 2012 Qtr1 2017 Qtr2 2013 Qtr3 2015 Qtr3 2012 Qtr4 2013 Qtr1 2015 Qtr1 2012 Qtr2 2013 Qtr4 2015 Qtr4 2013 Qtr2 2015 Qtr2 2014 Qtr3 2014 Qtr1 2014 Qtr4 2016 Qtr3 2014 Qtr2 2016 Qtr1 2010 Qtr3 2010 Qtr1 2016 Qtr4 2016 Qtr2 2010 Qtr4 2010 Qtr2 2017 Qtr4* quality iron ore 65%Fe extra premium (RHS) 62%Fe Index + 3 x per 1%Fe (LHS) 65%Fe Index (LHS) will persist into Source: Metalytics (2017) *2017 Qtr4 to 20 October 2017 the 2020s.

Product Fe% SiO % AL O % S% P% Indicative magnetite 2 2 3 product quality from South Australia 66.5 – 70.0 1.8 – 3.36 0.2 – 1.9 0.002 – < 0.01 0.005 – 0.009 Global producer 67.90 0.75 0.16 0.002 0.025 South Australia (Sweden) Global producer 67.75 1.40 0.55 0.007 0.035 (Brazil)

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 15 Meeting the supply chain challenge

South Australia’s existing freight and logistics, water New generation for more competition - The State has • Determining the integrity, relevance and accessibility and electricity infrastructure will require development used its own electricity contract to attract Solar Reserve’s solar of existing hydrogeology data available through State to meet the challenges from the increasing future thermal project to Port Augusta, increasing competition in the Government and industry databases; magnetite production volumes to be delivered to market and putting downward pressure on prices. market at globally competitive levels and costs. • Identifying opportunities and addressing barriers for South Australian gas incentives - The State now provides collection of groundwater data from current and future The State Government is implementing initiatives to targeted incentives to ensure more gas is sourced and used industry activity in identified priority areas; and address the development of bulk commodity and utilities in South Australia, replacing coal-generated power from the • Identifying other economic and environmentally-sustainable infrastructure capacity and demand. Investment in private national market. water sources. and public-owned export infrastructure in the State will create Energy Security Target - The State’s future Energy Security thousands of jobs and ensure the development of a world- Target will ensure more South Australian-generated power is TRANSPORT AND UTILITIES INFRASTRUCTURE class freight and logistics system. derived from clean and secure energy sources. The State Government will work with industry to identify OUR ENERGY PLAN multiuser infrastructure corridors to support exports of WATER FOR RESOURCES magnetite product. Facilitating access to existing transport In response to the transition in Australia’s National Electricity Water is a vital natural resource and is a limiting factor in infrastructure will increase the success of the Strategy and Market, the South Australian Government is implementing the development of some of the most prospective areas for enable early investments to develop the existing pipeline a comprehensive plan to take charge of the State’s energy resources development in regional South Australia. of projects. future and deliver reliable, affordable and clean power. “Our Energy Plan” will ensure more of the State’s power is sourced, The Water for Resources project is being developed by The State’s existing infrastructure will need to be upgraded generated and controlled in South Australia. The Plan’s key the Resources Infrastructure and Investment Task Force in and expanded to meet the expected demand created by elements will result in a more competitive, reliable, sustainable partnership with other government agencies and specialised the 2030 magnetite production volume target of 50mtpa and affordable energy supply for industry, businesses and research organisations to address South Australia’s major envisaged in the Strategy. Priority projects previously identified communities including: challenges locating, using and sustainably managing water in the Regional Mining and Infrastructure Plan include: resources. Battery storage and Renewable Technology Fund - • Commercially-viable, deep-sea ports to consolidate social Building one of the world’s largest batteries to store energy from Proposed actions to address these three challenges within and environmental impacts and provide multiuser access to the wind and sun that supports clean and affordable power. South Australian regions with high mineral development cost-effective shipping solutions; potential include: New gas power plant - The State Government is building • Supporting the delivery of regional electricity transmission its own gas-fired plant that will provide more back-up power • Confirmation of priority areas for future groundwater projects; and when we need it most. exploration and mapping; • Developing multiuser land infrastructure corridors Local powers over the national market - Recently enacted • Collation and interpretation of existing hydrogeology data to and protecting environmentally-significant areas from legislation provides stronger powers to bring greater market identify areas for future groundwater exploration; incompatible uses. control back into South Australia’s hands.

16 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Supporting South Australia’s steel industry

The Australian Steel Institute estimates that potential exists to increase the current resource about 60 Australian jobs are supported for estimate significantly. The integrated steelmaking every 1,000 tonnes of locally produced steel. supply chain uses magnetite as an energy efficient The structural steel sector accounts for about feedstock for the steelworks. SIMEC Mining, part of 1.6 million tonnes a year of fabrication work and steel industry employs more the GFG Alliance, is currently assessing options to than 90,000 people, generating $30 billion in grow magnetite ore production from the current annual turnover. 2Mtpa to as much as 20Mtpa. The rebranded Liberty OneSteel Steelworks GFG Alliance has committed to leading the way located in Whyalla is the only Australian in modernising the Australian steel sector by manufacturer of “long” products including transforming the Liberty OneSteel Steelworks in Australian steel rail - ARTC structural steel and rail. Maintaining local Whyalla into a world-class steelmaking facility. capability in steelmaking benefits South Australia As part of the Magnetite Strategy and through the by providing jobs to a highly skilled workforce and Steel Task Force, the South Australian Government ensures local production of structural steel that will continue to advocate for Australian, State and meets Australian Standards. Territory Governments to implement procurement In September 2017, the GFG Alliance (consisting policies that encourage the domestic steel of the Liberty House Group and the SIMEC Group) industry to invest, restructure and innovate. The acquired the Whyalla Steelworks, the Port of Steel Task Force is also working with the GFG Whyalla, and the Middleback Ranges iron ore and Alliance to expand capacity and provide third- associated infrastructure assets. party access to the Port of Whyalla. The identified iron ore resources contained within the Middleback Ranges include around 200 million tonnes of magnetite. Substantial exploration

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 17 0 250 km MUSGRAVE PROVINCE South Marla Australian Coober Pedy CAIRN HILL magnetite Snaefell PERCULIAR KNOB Hawks Nest

CURNAMONA resources PROVINCE

GAWLER CRATON Magnetite contained GEOSYNCLINE Maldorky resource (M tonne) Olary Creek Mutooroo Magnetite Less than 10 MIDDLEBACK RANGES Razorback 10 - 24 CENTRAL EYRE IRON PROJECT 25 - 59 WILGERUP Bungalow Fusion 60 - 299 MURRAY Gum Flat BASIN Adelaide

Greater than 300

Current 8 November 2017 Major iron ore mine (approved) Developing iron ore projects Eyre & Western Region Iron ore occurences Far North Region OTWAY BASIN Tenements under exploration Yorke & Mid North, for iron ore Braemar Region Mount Gambier

204860-020

18 SOUTH AUSTRALIA’S MAGNETITE STRATEGY South Australia’s operating and AUSTRALIA advanced magnetite projects

Operating mines and approved projects

Company Name GFG Alliance Cu-River Mining Australia Iron Road

Project Name Magnet Project Cairn Hill Project (incl. Mt Woods Central Eyre Iron Project (Middleback Ranges) Magnetite Project) Resource Size 183Mt 570Mt 4,510Mt SOUTH Average Fe Grade 34.8% 47% (27%) 16% Product Concentrate DSO/Magnetite concentrate Magnetite concentrate AUSTRALIA Status Operating Operating/ advanced Mine and development exploration approval 2 9 Advanced projects and deposits

Company Name Magnetite Mines Carpentaria Resources Minotaur Explorations/ 8 Sumitomo

Project Name Mawson Iron Project Hawsons Iron Project Mutooroo Magnetite (incl. Red Dam Project) Project 5 4 6 Resource Size 4,920Mt 2,400Mt 1,500Mt 1. Magnet Project 3 1 Average Fe Grade 19.5% 17% 15% (Middleback Ranges) 7 Product Magnetite concentrate Magnetite concentrate Magnetite concentrate 2. Cairn Hill Project (incl. Mt Woods Magnetite Project) Status Advanced exploration Advanced exploration Advanced exploration 3. Central Eyre Iron Project ADELAIDE 4. Mawson Iron Project Company Name Havilah Resources Maosen Australia Southern Iron (Arrium) (incl. Red Dam Project) Project Name Maldorky Project Giffen Well Deposit Kestrel Project 5. Hawsons Iron Project Resource Size 451Mt 690Mt 123Mt 6. Mutooroo Magnetite Project 7. Maldorky Project Average Fe Grade 27% 31% 34.8% Existing and proposed 8. Giffen Well Deposit Product Magnetite concentrate Magnetite concentrate Concentrate deep water ports 9. Kestrel Project Status Advanced exploration Advanced exploration Advanced exploration Railway

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 19 Magnetite Strategy Strategy Establish South Forge private-public Support a strong Engage with Australia as a leading partnerships to build and sustainable stakeholders and global supplier of transformational, Australian steel Action industry partners magnetite products bulk- commodity industry export infrastructure within a multiuser Themes framework

steelmakers with confidence in South Australia’s abundant magnetite resources and provide an magnetite products, and build the State’s reputation additional platform to attract investment. as a reliable supplier to global markets. Theme 1 South Australia’s reputation as a low-risk investment Establish South Australia as Successful benchmarking of South Australian destination is already well-established. The State produced magnetite products will improve consistently ranks in the top 20 international a leading global supplier of international marketability. mining jurisdictions based on the Fraser Institute’s magnetite products “investment attractiveness index” derived from its B: MARKET SOUTH AUSTRALIA’S annual survey of mining companies. MAGNETITE RESOURCES TO GLOBAL A: BENCHMARK SOUTH AUSTRALIA’S STEELMAKERS Advocacy by the State Government alongside our MAGNETITE PRODUCTS Implementation of South Australia’s Magnetite magnetite project proponents at international To capitalise on the emerging global demand for Strategy will result in the production of a trade and investment forums will help build global high-grade, low-impurity magnetite products to communications plan to attract investment. The confidence in industry and strengthen South supplement lower-grade feedstock, South Australian communications plan will be complemented by Australia’s position as an emerging magnetite region exporters can benefit from benchmarking the quality the State Government’s international engagement with financiers, steelmakers and iron ore traders of magnetite products exported from the State. strategies and action plans. around the world. Benchmarked products that consistently behave Execution of the communications plan will further The State Government is committed to unlocking predictably during smelting conditions will provide increase global awareness of South Australia’s our magnetite resources and has a role to play

20 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Magnetite Mines’ fl agship project Razorback Ridge - Magnetite Mines Limited

through agencies, including Investment Attraction industry, communities and regulators have a new South Australia, in facilitating investment attraction guide to smarter and better coordinated land use. initiatives such as targeted trade missions and Theme 2 The South Australian Government encourages a engagement strategies, and increasing South coexistence model to maximise the social, economic Australia’s presence at international iron ore and Engage with stakeholders and environmental benefits from current and future steelmaking conferences. and industry partners land uses. There is currently no international magnetite mining The Magnetite Strategy recognises the benefits of and processing conference hosted anywhere in A: LAND ACCESS engaging with all mineral project developers to the world. Access to land is critical to the expansion of explore mutually beneficial land access solutions to The Strategy aims to establish a biennial, international our resource sector. It influences international overcome shared infrastructure challenges. This will magnetite conference in Adelaide to further competitiveness and provides for long-term accelerate the development of efficient pathways to strengthen recognition of South Australia as a sustainability. South Australia is a pioneer in this field export. globally significant magnetite producing jurisdiction. – and recognises the immense value of the natural environment to all exports, economy and way of life. B: ALIGNMENT WITH INDUSTRY SERVICE C: ESTABLISH A RESEARCH AND PROVIDERS The implementation of the Magnetite Strategy DEVELOPMENT ALLIANCE The South Australian Government’s Mining will align with South Australia’s “Multiple Land Use Government will cultivate partnerships between Industry Participation Office (MIPO), a division of Framework” by promoting early and meaningful local and international research institutions and the Department of State Development, is a critical engagement with stakeholders, particularly potential exporters. These partnerships will partner with industry. MIPO was established to help Traditional Owners and local communities, during to the development of a magnetite research and build South Australia’s mineral and energy resources the feasibility stages of projects. Understanding how development alliance in Adelaide. Government will supply chain capability and assist local companies all stakeholders will be affected, gaining their respect partner with the alliance to undertake research into to capture opportunities from national and global and building trust across communities are key the sustainable, economic extraction and processing resources projects. elements in maintaining South Australians’ support of magnetite ore. for the continued expansion of the resources sector. MIPO helps suppliers understand the requirements of The alliance will provide industry-leading expertise resource project proponents by: The Multiple Land Use Framework encourages in elemental analysis, metallurgy and mineralogy of • providing information about future projects transparent project planning and decision-making magnetite, leading to the definition of benchmarked to minimise land use conflict and promote clear • identifying gaps in local capability and providing products that achieve predictable, specific standards engagement. It builds on the commitment to data on the opportunities that exist during the steelmaking process. engage in the most effective way with South • working with companies to build capability and Australians on decisions that affect them. capacity The first framework of its kind to be released by • partnering with Investment Attraction South an Australian State or Territory means landholders, Australia to ensure investment attraction efforts are coordinated and targeted.

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 21 Using a range of government programs, MIPO: Coordination will also be required to ensure that the • assists local firms to build capacity and capability economic opportunities created by investment in South Australian innovation: to meet the needs of the State’s mining and Theme 3 new infrastructure are captured by other regional the world’s fi rst “rotainers” mineral processing projects industries. loading iron ore at Port Forge private-public Adelaide - Flinders Ports • develops “Centres of Excellence” that bring In collaboration with industry, the South Australian together South Australian manufacturing firms partnerships to build Government will support the development of with key resource sector providers transformational, bulk- multi-user supply chain infrastructure to improve • fosters partnerships across the manufacturing, commodity export the feasibility of projects and establish economies services, research and resources sectors, making infrastructure within a of scale. business intelligence more readily available and, multiuser framework The Magnetite Strategy is not a stand-alone • works with industry to establish collaborative document. It is part of an integrated strategic partnerships where companies can boost their approach adopted by the South Australian capabilities and capacity to supply goods and/ South Australia has produced a large body of work Government. The Strategy sits alongside and builds or services to a range of mining and mineral on solutions to bulk mineral export infrastructure on on the strengths of the Integrated Transport and processing projects. the Spencer Gulf. The Regional Mining Infrastructure Land Use Plan, the Regional Mining Infrastructure Plan recommends assessment of infrastructure Plan, South Australia’s Strategy, Our Energy options should focus on multi-user rather than Plan and the Leading Practice Review of the Mining single-user infrastructure solutions. Act and Regulations, as well as the China, India, North Successful implementation of the Magnetite Strategy Asia and Southeast Asian Engagement Strategies and will require collaboration with industry to identify the MENA Action Plan. preferred infrastructure corridors and aggregation The South Australian Government is already working opportunities that can support bulk-export supply with industry to develop a 50-year Port Strategy chain capacity within a multi-user framework. to maximise economic opportunities arising from The Port of Whyalla has excess capacity and the South Australia’s existing and proposed port assets. potential for expansion that could meet the needs of The Strategy is an opportunity to position ports to other users conditional upon the provision of third- deliver broader economic growth as well as improve party access. transport logistics services through innovation. Facilitating improvements in access to existing, Successful implementation of this theme will underutilised transport infrastructure and the require coordination across numerous Government development of new bulk-export infrastructure will departments. be required to meet the Strategy’s ambitious targets.

22 SOUTH AUSTRALIA’S MAGNETITESOUTH STRATEGY AUSTRALIA’S MAGNETITE STRATEGY The South Australian Government is steadfast in its position that a sustainable steelmaking industry Theme 4 is of national significance. The government has implemented several policies and other initiatives Support a strong and to support the continued commercial operation of sustainable Australian steelmaking in this country, including establishing steel industry the Steel Task Force which successfully coordinated efforts to secure investment in South Australia’s steel sector. The Liberty OneSteel Steelworks (part of the GFG Other initiatives taken by the Steel Task Force include Alliance) in Whyalla is Australia’s only producer of ensuring Australian Standards for steel are upheld rail and hot-rolled structural steel products. As a in government procurement of steel products and nationally strategic industry, Whyalla’s steelmaking providing financial assistance to steel fabricators capability, along with its integrated mining and port to gain and maintain appropriate accreditation. operations, underpins the continued sustainability The South Australian Government has supported and economic development in the Upper Spencer strengthening the operations and investigative Gulf region in South Australia. powers of the Anti-Dumping Commission to Magnetite sources from the Middleback Ranges eradicate the illegal “dumping” of foreign-made steel near Whyalla are processed into pellets to feed products into the Australian market. the Liberty OneSteel Steelworks blast furnace. The State Government, through the Steel Task Force, Magnetite currently represents around 45 per cent will coordinate cross-government efforts to support of the identified iron ore resources in the GFG Alliance’s investment in Whyalla’s steelworks, Middleback Ranges. mines and associated transport infrastructure. The Liberty OneSteel Steelworks will benefit from The South Australian Government continues to an investment plan that will transform it into a advocate the development of a National Steelmaking world-class steelmaker. The transformation plan Road Map that will set out a long-term vision for a includes a 10-fold increase in magnetite production, sustainable and globally competitive Australian reinvigoration of the supply chain, and development steel industry. Pouring liquid steel at the Whyalla of new sources of co-generated power which Steelworks - Liberty OneSteel will create a more sustainable and internationally competitive steel industry hub in South Australia. The transformation will result in a significant increase in steel production and redevelopment of port capabilities to bolster the supply of structural steel, rail and other products to local and global markets.

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 23 Measuring our success

2018 2020 2022 2027 2030 Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Goal 6

By 2018, a Memorandum By 2020, Adelaide By December 2022, new By 2027, the opening By 2027, initial shipments By 2030, South Australia of Understanding will will have hosted the magnetite projects in of magnetite mines of magnetite products will have firmly have been signed that world’s first magnetite South Australia will have in Eyre Peninsula, the will depart South established its niche paves the way for the conference, establishing attracted at least $10 Braemar Province and Australia from a new in the global iron ore establishment of a South Australia’s billion of committed Far North South Australia deep-water port on the marketplace and be magnetite research and reputation as an investment enabling will have resulted in Spencer Gulf. producing at least 50 development alliance emerging supplier of production to commence. meaningful economic million tonnes per annum in South Australia by magnetite products to growth in regional of magnetite products. December 2019. global steelmakers. towns by creating business opportunities and generating new employment.

Middleback Ranges mining - SIMEC Mining

24 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Forecast royalty revenue

million tonnes per annum $2.87 billion 22 magnetite production over 25-year mine life

million tonnes per annum $1.17 billion 10 magnetite production over 25-year mine life

million tonnes per annum $97 million 2 magnetite production over 5-year mine life

Artists rendering of Capesize and roll-on roll-off ships at Iron Road’s proposed deep water port; Cape Hardy, Eyre Peninsula - Iron Road Ltd

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 25 1923-1932 Steel made from South Australian ore used to construct the Sydney History of iron and Harbour Bridge. steel industry in South Australia

1888 1915-1917 Franz Heinrich Ernst Siekmann’s Shipping of South Australian iron 1839 Mount Minden Mining Company 1899 ore to BHP’s Newcastle steelworks Substantial deposits of ironstone granted 800 acre lease for BHP granted leases over begins. BHP commences supply of in the Middleback Ranges first exploration and mining at Iron Iron Knob and broader rail to construct the Trans-Australian recorded by Edward John Eyre. Knob. Supplies iron oxides to Middleback Ranges area. Railway, launching BHP as a BHP for use as a flux for lead steelmaker and South Australia as smelting at . their primary source of iron ore.

26 SOUTH AUSTRALIA’S MAGNETITE STRATEGY 1915-1938 1937-1941 1968 South Australia exports iron ore BHP construct blast furnace 1915-1949 Whyalla Steelworks completed, to USA, Europe, Great Britain and in Whyalla and commence Up to 99% of Australian demand pellet plant and the coke ovens Japan until Government announces shipbuilding activities – HMAS for iron ore is met by supply from both begin operation. an embargo on iron ore exports Whyalla launched in 1941. Middleback Ranges. from Australia in 1938 (repealed in 1966).

1978 Iron Curtis, the 64th ship manufactured in Whyalla, launched in January 1978. Shipyards closed later that year. 2010 2011 IMX Resources officially opens 2000 Arrium commences mining at the Cairn Hill magnetite mine, the BHP divests the Whyalla Peculiar Knob, South Australia’s first new iron ore mine owner in steelworks and mining operations second iron ore mine outside the South Australia since 1899 to OneSteel (Arrium). Middleback Ranges. (mine now owned and operated by Cu-River Mining Australia).

2017 2017 Iron Road receives mining lease GFG Alliance acquires Arrium’s and development approval for their Australian business with plans Central Eyre Iron Project – potential 2030 to expand Whyalla steelmaking to become Australia’s largest and mining operations. magnetite product exporter.

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 27 Acknowledgements

The Government of South Australia acknowledges Significant input was provided by a number of and thanks the many stakeholders who have agencies, including: contributed to the production of this Strategy either • Resources Infrastructure & Investment Task Force, through the Government’s “YourSay” website, at Department of the Premier and Cabinet magnetite industry workshops or by direct contact • South Australian Steel Task Force, Department of with the Strategy’s Steering Committee members. the Premier and Cabinet The Government of South Australia particularly • Resources and Energy Group, Department of the acknowledges the contribution of: Premier and Cabinet • South Australian Magnetite Strategy Steering • Marketing, Communications and Industry Committee, including representatives from SIMEC Partnerships, Department of State Development Mining (member of the GFG Alliance), Iron Road, • Mining Industry Participation Office, Department Magnetite Mines, Cu-River Mining Australia, Havilah of State Development Resources and Carpentaria Resources • Investment Attraction South Australia, Department • South Australian Chamber of Mines and Energy of State Development (SACOME) • The Future Industries Institute, University of South Australia • SMaRT Centre, University of New South Wales.

28 SOUTH AUSTRALIA’S MAGNETITE STRATEGY “By capitalising on the emerging Image above: Crushed magnetite ore on a conveyor, Middleback Ranges - SIMEC Mining global demand for higher-grade iron products, South Australia has an opportunity to position itself as a leading global magnetite- producing region.” Dr Ted Tyne Chair South Australian Magnetite Strategy Steering Committee Magnetite and haematite stockpiles in storage sheds - SIMEC Infrastructure

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 29 Suite of integrated strategies

30 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Glossary

Blast furnaces Induration Milling A type of metallurgical furnace used for smelting iron The process of hardening through convention, heat A complex yet cost effective technique used to ore in the production of steel and pressure create nanoparticles

Direct Reduced Iron (DRI) Investment Attractiveness Index Mtpa Also known as sponge iron, is produced from direct An overall Investment Attractiveness Index is Million tonnes per annum reduction of iron ore (in the form of lumps, pellets constructed by combining the Best Practices Mineral or fines) by reducing gas produced from natural Potential index, which rates regions based on their Pellets gas or coal geologic attractiveness, and the Policy Perception Are produced by taking very fine iron ore and/or Index, a composite index that measures the effects concentrates (e.g. magnetite) and agglomerating Fines of government policy on attitudes toward them with moisture and a binder in balling discs or These are high-quality fine ore powders, stemming exploration investment drums to form balls approximately 16mm in diameter. from lower-grade sources of iron ore having These are then indurated (baked and fused) at undergone beneficiation, using techniques like Lump temperatures of 1,275 degrees centigrade to form crushing, milling, gravity or heavy media separation, The natural (30mm x +6mm) fraction of iron ore that very strong agglomerates for charging to the screening and silica froth flotation to improve the is produced predominantly from Direct Shipping Ore blast furnace concentration of the ore and remove impurities (DSO = ore that is mined and crushed and screened only, before being sold) EDR Economic Demonstrated Resources

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 31 “Achieving the ambitious vision of making South Australia’s magnetite the world’s choice for steelmaking will create and sustain thousands of jobs across the mining supply chain, particularly for residents and businesses in regional communities.”

Hon Tom Koutsantonis MP Minister for Mineral Resources and Energy

32 SOUTH AUSTRALIA’S MAGNETITE STRATEGY Magnetite separation feathering - SIMEC Mining

MAKING OUR STATE’S MAGNETITE THE WORLD’S CHOICE FOR STEELMAKING 33 Contact

Director, Magnetite Strategy Resources, Infrastructure and Investment Task Force Department of the Premier and Cabinet Level 4, 11 Waymouth Street Adelaide, South Australia 5000 GPO Box 320 Adelaide, South Australia, 5001 T: +61 8 8303 2204 E: [email protected] www.minerals.dpc.sa.gov.au/magnetitestrategy

Published December 2017. No responsibility for any loss or damage caused by reliance on any of the information or advice provided by or on behalf of the state of South Australia, or for any loss or damage arising from acts or omissions made, is accepted by the state of South Australia, their o cers, servants or agents. Produced by the Department of the Premier and Cabinet © December 2017. Content correct at time of printing. www.minerals.dpc.sa.gov.au/magnetitestrategy 34 SOUTH AUSTRALIA’S MAGNETITE STRATEGY