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REGIONAL NEWS - AUSTRALIA/OCEANIA 18 E&MJ; • JULY 2017 www.e-mj.com Rio Tinto Studying Koodaideri Iron Ore Development Rio Tinto has budgeted A$30.9 million for a feasibility study of development of its Koodaideri iron ore project in the Pilbara region of Western Australia. The study will examine the project as Rio Tinto's next potential major mining de- velopment in the Pilbara, with production intended to replace existing production. A prefeasibility study of the Koodai- deri project was released in Novem- ber 2016, outlining a project that would process 40 million metric tons per year (mt/y) of high-grade iron ore through a dry crushing and screening plant. Construction would include non- process infrastructure, product stock- yards, a rail loop and load-out facilities, and a 170-km rail link. Capital required was estimated at $2.2 billion. The current feasibility study will build on the prefeasibility study and consider a range of capital, timing, and scale options. If construction were to begin by late 2019, first ore could be delivered by 2021. Proved and probable reserves at Koo- daideri currently total 594 million mt at a grade 61.6% iron. Rio Tinto Iron Ore Chief Executive Chris Salisbury said, "We are pleased to be investing a further A$30.9 mil- lion in Western Australia, which will be spent with local businesses and suppli- ers as well as firms outside the state. The Koodaideri development will require an expected 1,600 construction jobs and a further 600 operational staff if approved. "We remain firmly focused on our val- ue over volume strategy and maximizing returns through enhanced productivity. We are examining the Koodaideri project as an option to help us maintain our low-cost competitive position and assist in main- taining our Pilbara Blend product quality." The study will focus on obtaining nec- essary consent and permits, increasing the company's understanding of the ore- body and technical elements, and provid- ing data necessary to validate the project. A final decision on progressing the Koodaideri iron ore development will be made following completion of the feasi- bility study and a review by the Rio Tinto investment committee and board. BHP Approves South Flank Initial Funding On June 26, BHP announced the invest- ment of US$184 million in the South Flank sustaining mine project in central Pilbara, Western Australia. BHP Presi- dent Operations, Minerals Australia, Mike Henry said the funding would generate several hundred construction jobs and provide opportunities for Western Austra- lian suppliers. The South Flank project, which will leverage and expand the existing Mining Area C hub, is BHP's preferred option to replace production from the 80-metric-ton-per-year (mt/y) Yandi mine when it reaches the end of its economic life in the early-to-mid 2020s. The proj- ect is expected to be submit- ted for board approval in the middle of 2018, with first ore targeted for 2021 and ramp- up timed to coincide with the ramp-down of Yandi. Full de- velopment of South Flank would generate several thousand jobs during construction. Henry said the capital efficient South Flank project was a compelling option to re- place Yandi production and offered attrac- tive returns. Its high-grade lump and fines ore and a strip ratio in line with the Western Australia Iron Ore (WAIO) average would es- tablish it as a highly competitive operation. The initial funding will be used pri- marily for the expansion of accommoda- tion facilities to support current and fu- ture workforce requirements. "As well as supporting our current op- erational requirements, this work will ad- vance potential first ore from South Flank, while we further optimize the full develop- ment and progress external and internal approvals," Henry said. "As we have said previously, a continuing stable investment environment in Western Australia is re- quired to underpin ongoing investment in the business, including this project." The capital cost for South Flank is ex- pected to be in the range of US$30 to US$40 per mt, with expenditure fitting within WAIO's previously indicated av- erage sustaining capital expenditure of US$4 per mt over the next five years. "The capital efficiency of South Flank is underpinned by the planned use of ex- isting infrastructure at the Mining Area C operation, which would, if approved, become one of the largest stand-alone iron ore processing centers in the world, within reach of several billion mt of high- grade ore," Henry said. The mining camp at the Kodaideri iron ore project in Western Australia. Development of South Flank would generate several thousand jobs during construction.