Iron Ore

Daisy Summerfield (daisy.summerfield@ga.gov.au)

Iron (Fe) is a metallic element which constitutes about 5% of the Earth's crust and is the fourth most abundant element in the crust. Iron ores are rocks from which metallic iron can be economically extracted. The principal iron ores are hematite (Fe2O3) and magnetite (Fe3O4).

Hematite is an iron oxide mineral. It is non-magnetic and has colour variations ranging from steel silver to reddish brown. Pure hematite mineral contains 69.9% iron. It has been the dominant iron ore mined in Australia since the early 1960s and approximately 96% of Australia's iron ore exports are high grade hematite, most of which has been mined from deposits in the Hamersley province in Western Australia (WA). The Brockman Iron Formation in the Hamersley province is a significant example of high grade hematite iron ore deposits.

Magnetite is an iron oxide mineral generally black in colour and highly magnetic, the latter property aiding in the beneficiation of magnetite ores. Magnetite mineral contains 72.4% iron, which is higher than hematite but the presence of impurities results in lower ore grade, making it more costly to produce the concentrates used in steel smelters. Magnetite mining is an emerging industry in Australia with large deposits in the Pilbara region of WA being developed.

The largest project, which has a current value of more than $6 billion, is the Sino Iron project being developed by the Chinese company CITIC Pacific. Other major magnetite projects include the $2.6 billion Karara joint venture project, which is owned by Gindalbie Metals and Chinese steel producer, Ansteel, and the $2.8 billion Southdown magnetite project owned by Grange Resources. Sino Iron project is gearing up for commencement of production while the Karara Magnetite Iron Ore Project commenced production of magnetite concentrate in December 2012. Grange Resources' Southdown Magnetite development at Albany WA was planned to start in 2015 but that may change due to the current economic environment.

Mining and processing hematite and magnetite ores

High grade hematite ore is referred to as direct shipping ore (DSO) because it is mined and the ores go through a relatively simple crushing and screening process before being exported for use in steel making. Australia's hematite DSO from the Hamersley region in WA averages from 56% to 62% iron. Like hematite ores, magnetite ores require initial crushing and screening, but undergo a second stage of processing that relies on the magnetic properties of the ore and involves magnetic separators to extract the magnetite and produce a concentrate.

Further processing involves the agglomeration4 and thermal treatment of the concentrate to produce pellets which can be used directly in blast furnaces, or in direct reduction steel making plants. The pellets contain 65% to 70% iron, which is a higher iron grade than hematite DSO currently being exported from the Hamersley region. Additionally, when compared to hematite DSO, the magnetite pellets contain lower levels of impurities, particularly phosphorous, sulphur and aluminium. These pellets are premium products which attract higher prices from steel makers, offsetting the higher costs of producing magnetite pellets.

Worldwide production trends

Hematite ores dominate the world production of iron ores and are sourced mainly in Australia and Brazil. Magnetite is increasing its presence in world production and this trend is likely to increase when large magnetite projects such as the Karara Iron, Southdown magnetite and Sino Iron projects are operational.

During 2011, China was the world's largest producer of iron ore with 43%, or 1200 million tonnes (Mt) followed by Australia with 17% or 488 Mt and Brazil with around 14% or 390 Mt of world production.

Resources

Map showing locations of Australia hematite and magnetite deposits and total resources are at :

In previous years, Geoscience Australia reported estimates of Australia's national resources of iron as tonnes of iron ore because these resources were dominantly hematite ores. However, as a result of on-going exploration and assessment of magnetite deposits, Australia has now identified substantial reserves and resources in both hematite and magnetite ores. Because of the high average grades (% Fe) of hematite ores when compared to the average grades for magnetite ores, it is necessary to report national resources in terms of contained iron. Accordingly, Australia's national resources of iron are now reported in two categories:

  • Tonnes of iron ore, and
  • Tonnes of contained iron.

Iron ore: In 2011, Economic Demonstrated Resources (EDR) of iron ore increased by 9% to 37 762 Mt, mainly as a result of resource increase for some deposits, including in the WA mines, BHP Yandi, Mining Area C, Nullagine, Hamersley and Hope Downs. Resource definition of existing deposits and the inclusion of new magnetite deposits have also contributed to the increase in EDR. Paramarginal Demonstrated Resources have increased from 700 Mt to 1414 Mt. The Inferred Resource increased by 29% to 61 489 Mt, mainly because of increases in some deposits in the Hamersley and Mining Area C mine operations. The inclusion of new and newly defined resources for existing deposits also contributed to the increased Inferred Resources for 2011. Western Australia has about 94% of Australia's total Identified Resources of iron ore with the majority of the resources occurring in the Pilbara Region.

However, South Australia (SA) is emerging as the second largest producer of iron ore in Australia, accounting for more than 5% of the total EDR. Australia's EDR has a resource life of 77 years. Figure 8 and Figure 9 show iron ore EDR and Inferred resources for each State and for the Northern Territory.

Figure 8 is a pie chart showing the proportion of iron ore EDR in each state and the Northern Territory. Western Australia dominates with 94.21%.

Figure 8. Proportion of iron ore EDR in States and NT.

Figure 9 is a bar chart comparing total EDR of iron ore in millions of tonnes against Inferred resources of iron ore for each state and the Northern Territory.

Figure 9. Total EDR and Inferred resources of iron ore in States and NT.

Contained Iron: As at December 2011, Australia's EDR of contained iron was estimated to be 18 152 Mt while Paramarginal Resources were 501 Mt and Inferred Resources were 29 204 Mt.

Accessible EDR

Australia has Accessible EDR (AEDR) of iron ore totalling 37 762 Mt, of which 94% occurs in WA.

JORC Reserves

The total Joint Ore Reserve Committee (JORC) Code Reserves of iron ore were estimated to be 15 032 Mt, representing 40% of accessible EDR. Contained iron is 7804 Mt, or 43% of the EDR. However, unreported reserves and resources are not included, resulting in a loss of accountability. Based on the data which is publicly available, JORC Code Reserves are sufficient for approximately 31 years at the current rate of mine production.

Several companies have reported initial resources on either new or known deposits that are now being drilled for resource development which have contributed to Australia's iron ore resource base for 2011. These deposits include the Nyidinghu (Fortescue Metals Group Ltd), McCamey's North (Atlas Iron Ltd), Weckl and Buckland Hills (Aquila Resources Ltd), Byro FE1 (Athena Resources Ltd), Mount Alexander (Zenith Minerals Ltd), Cohen (Buxton Resources Pty Ltd), Mount Philp (Cerro Resources NL), Muster Dam (Minotaur Exploration Ltd), Peak Hill (Padbury Mining Ltd JV), Area C, Robinson Range Iron Project (PepinNini Minerals Ltd), Feral, Perenjori Iron Ore project (Quest Minerals Ltd) and Die Hardy (Radar Iron Ltd). These deposits are a few of the new deposits that were reported and some are discussed in 'Industry Developments' section of this report.

Exploration expenditure

Australian Bureau of Statistics (ABS) data indicates that iron ore exploration expenditure in Australia for 2011 totalled $905.3 million, a 64% increase on the $553.1 million spent in 2010. About $802.4 million was spent on iron ore exploration in WA which represented 89% of total iron ore exploration expenditure. Western Australia also accounted for 25% of the total mineral exploration expenditure in Australia during 2011, which amounted to around $3573.3 million. Iron ore exploration expenditure in SA was $63.5 million, Northern Territory (NT) $30.0 million and Tasmania (Tas) was $1.5 million.

Production

Australia's total production of iron ore for 2011 was 488 Mt with WA producing 474 Mt, or 97% of overall production. South Australia increased its iron ore production from approximately 9.2 Mt in 2010 to just over 10 Mt for 2011, which represented 2% of Australia's total production of iron ore. South Australia's iron ore resource is small when compared with Western Australia, but it is emerging to become the second major iron ore producing State.

The Bureau of Resources and Energy Economics (BREE) reported Australia's iron ore exports during 2011 to be 439 Mt, a 9% increase from 2010 of approximately 402 Mt. BREE has forecast an increase in iron ore exports of at least 12% or 493 Mt in 2012 and around 6% or 525 Mt in 2013. Project expansions by large operations such as Rio Tinto and BHP to medium operations by the Fortescue Metals Group will support these projected increases. The anticipated large magnetite project production by Sino Iron also is included in the predicted increases. The predictions are a direct response to increasing consumption from developing countries such as China, India and Brazil. BREE forecast an increase in steel consumption between 2013-17 by China (4% per year), India (7% per year) and Brazil (3%) as a result of major infrastructure, rail, highways, and public housing developments. The iron ore industry has echoed the sentiment of an increase in global demand, but is expecting a slower rate of growth.

World ranking

Australia has the world's largest EDR with 22% of the world's iron ore followed by Brazil with 17%, Russia with 15% and China with 14%. In terms of contained iron, Australia has 22% of world EDR while Brazil has the second largest EDR with 20%.

Industry Developments

Western Australia

Rio Tinto Ltd: Rio Tinto US$15 billion investment for its five years growth program which started in 2010 has been the centre of events during the 2011. The company's growth expansion for its Pilbara operations will include, but is not limited to, the Brockman 4 mine increasing capacity from 22 Mt to 40 Mt per annum (Mtpa), extending mine life at Marandoo Mine to 16 years and increasing to 15 Mtpa capacity of the new open cut mine at Hope Downs 4. These expansion projects are aimed at increasing Rio Tinto's production to 353 Mtpa by 2015. The first stage for 225 Mtpa production capacity was achieved during the first quarter of 2011.

An additional highlight for Rio Tinto was the approval by the Western Australian Government of the company's infrastructure project planned for the town of Wickham. This project will give more support to the company's growth program by providing accommodation for the project's workforce. The government states that this infrastructure development will compliment the State's Pilbara cities initiative. Rio Tinto says that the planned infrastructure and company expansion will enable it to meet the anticipated increase in demand from the Chinese steel industries, initially from its current production of 700 Mtpa and later through growth to around one billion tonnes per annum towards 2030.

BHP Billiton Ltd: The company's Western Australia Iron Ore (WAIO) reported a record production for the year ended December 2011, raising its annual capacity to 178 Mtpa. One of the highlights for 2011 was the company's approval for the development of the new Orebody 24 mine in the Pilbara region of WA which is reported to be worth US$822 million. The development will include infrastructure such as an ore crushing plant, train loadout facility, rail spur and other supporting facilities. The new mine has a projected capacity of 17 Mtpa and will help to maintain the company's Mount Newman joint venture operations production output contributing to BHP's near term production target of 350 Mtpa. Completion of the Rapid Growth Project 5 (RGP5) expansion projects will also contribute to the anticipated increase production capacity to 220 Mtpa . BHP reported that the initial production from RGP5 occurred during the third quarter of 2011.

Infrastructure development projects which will service the WAIO operations are in progress but large capital projects such as the outer harbour project have been delayed in favour of developing the inner harbour expansion project. This change follows an evaluation by BHP which demonstrated the cost benefit of expanding the existing inner harbour. The expansion will include the development of two additional berths which, according to the company, will increase the inner harbour capacity to 220 Mtpa. It is anticipated that the commissioning of the inner harbour will be in the second half of 2012.

Fortescue Metals Group (FMG): In October 2012, FMG announced the commissioning of its 25 Mtpa second Ore Processing Facility (OPF) at Christmas Creek 110 km north of Newman in the Pilbara region. The company reports that the second OPF will lift the capacity of Christmas Creek mine to 50 Mtpa which will result in combined output of Christmas Creek and nearby Cloudbreak to 95 Mt by end of 2012. This development marks another milestone in the company's expansion plan to increase production capacity to 115 Mtpa by end of the first quarter in 2013 through the addition of the anticipated first ore production from the Solomon Firetail mine. The company has also announced initial reserves for the Solomon Hub of approximately 716 Mt. These reserves are a compilation of several deposits, including 200.9 Mt at the Firetail mine.

CITIC Pacific Ltd: When commissioned, the company's Sino Iron project will be Australia's largest magnetite iron ore development project. The project will have six production lines with the capacity to produce a total 24 Mtpa of magnetite concentrate. The company reports that some of the project supporting infrastructure has been completed, including a 30 km slurry pipeline, while integration of a power station, desalination plant and the port area are ready for commissioning. The first of the six production lines is in its final phase and work on the second production line has started.

Atlas Iron Ltd: The company has announced development and expansion plans for its Horizon 1 Growth Program categorised into three phases. The initial phase will include expansion of the pit for its existing Wodgina operation and the development of a new Mount Dove mine approximately 70 km south of Port Hedland and the Abydos mine 130 km south of Port Hedland. The company anticipates production growth of 10 Mtpa by 2013 once Mount Dove and Abydos are operational. Phase 2 of the Horizon 1 development will bring the company's production capacity to 12 Mtpa through its joint venture (with Altura Mining Ltd) Mount Webber mine project.

Gindalbie Metals Ltd: The first production of magnetite concentrate by Karara Iron Ore Project was announced in November 2012. The Karara Iron Ore Project is being developed by Karara Mining Limited, which is a 50:50 Joint Venture between Gindalbie Metals and Chinese steel producer, AnSteel. The company is currently ramping up production towards a target rate of 8 Mtpa. Gindalbie also reported a 1.5 billion tonne initial resource for the Lodestone magnetite project in 45 km southeast of the Karara project in WA's mid-west region. The company reports that, based on initial analysis, the Lodestone project has the potential to produce a magnetite concentrate grading at more than 63% iron with low impurities. The company also says that the Lodestone project can potentially become one of its stand-alone mine operations in the future.

Brockman Resources Ltd: Environmental approval for the development of the company's Marillana Iron Ore Project was received from the Department of Sustainability, Environment, Water, Population and Communities (DSEWPaC) and from the Western Australian Environmental Protection Authority. To date, the company has focused on securing rail and port infrastructure for the project and has formed an alliance agreement with QR National Ltd and Atlas Iron Ltd to conduct pre-feasibility and definitive feasibility studies for integrated mine, rail and port logistics for the East Pilbara region. Subject to the pre-feasibility study results, the alliance aims to complete the definitive feasibility study by 2013 with relevant infrastructure completed by 2016. The Marillana Iron Ore Project is located approximately 100 km northwest of Newman in the Pilbara region.

Cashmere Iron Ltd: The company has announced that it has entered an agreement with Esperance Ports Sea and Land for access to the expanded port at Esperance in the Great Southern region. The agreement allows for an allocation of 5 Mt once the port expansion occurs and a commercial agreement is reached between Cashmere Iron and the port operator. The company says that the agreement is important for the development of its Cashmere Down iron ore project. In its Annual Report, Cashmere Iron stated that three potential types of materials (hematite DSO, detrital iron deposit and magnetite) have been identified at Cashmere project which can be produced to marketable iron ore products. The company has reported Cashmere Down JORC Code compliant Resources of 1059 Mt (Measured 202 Mt, Indicated 779 Mt and Inferred 78 Mt).

Australasian Resources Ltd: The company has increased its rights to mine approximately one billion tonnes of iron ore at its flagship Balmoral South Iron Ore Project about 80 km southwest of Karratha. This was through a memorandum of understanding with its main share holder, Mineralogy Resources Ltd. In return, Mineralogy Resources earned a 50% interest in the Australasian Resources wholly owned subsidiary, International Minerals Pty Ltd. Another highlight for Australasian Resources has been the completion of the Balmoral South feasibility study update carried out by Promet Engineers, a lead consultant in the original feasibility study in 2008.

Flinders Mines Ltd: The Mining Lease for two tenements (Blacksmith and Anvil) at the company's Pilbara Iron Ore Project was granted during the year. The project is located about 60 km northwest of Tom Price in the Pilbara region. The company reports that the project's ongoing definitive feasibility study will continue to focus on mine planning, metallurgical testing and marketing. The project will produce up to 15 Mtpa of iron ore with the company reporting a current iron ore resource of 917 Mt at 55.2% Fe.

Venus Metals Corporation Ltd: The pre-feasibility study of the company's joint venture Yalgoo Iron Ore Project has indicated a technically viable and financially robust project. Located in the Yilgarn region of WA, the project has a JORC Code compliant magnetite resource of 698.1 Mt made up of 311.2 Mt Indicated Resource and 386.9 Mt Inferred Resource. Venus Metals reports that the pre-feasibility study was based on annual production of 7.5 Mtpa of magnetite concentrate grading 68% Fe for a mine life of more than 15 years.

Mindax Ltd: In April 2012, the company announced that a scoping study had been completed for the Mount Forrest Iron Project which is in the Yilgarn region about 650 km from the port of Esperance. The study considered two options for product types, beneficiated magnetite and beneficiated hematite direct shipping ore. Mindax stated that the study indicated a potentially robust project for Mount Forrest. The magnetite option was based on a 10 Mtpa production of magnetite concentrate for a mine life of approximate 18 years. Relative to this option, the company has reported a JORC Code Indicated Resource of magnetite totalling 248.2 Mt at 32.6% Fe and a JORC Code Inferred Resource of 14 624 Mt at 31.6% Fe.

Iron Ore Holdings Ltd (IOH): A pre-feasibility study for the company's Bungaroo South Project in the Pilbara region has confirmed the technical and financial viability for a 4 Mtpa to 8 Mtpa operational capacity. The signing of the Native Title agreement and approval of the mining lease for the Bungaroo South and Dragon deposits also added to the company's highlights during the year. The company says that the completed pre-feasibility study has confirmed that the new Bungaroo South mine will have an operational potential of 4 Mtpa to 8 Mtpa. In November 2012, the company has reported a total of 282.5 Mt of JORC Code Indicated (179.7 Mt at 58% Fe) and Inferred (68.6 Mt at 55.1% Fe) Resources for the Bungaroo South deposit.

Pluton Resources Ltd: Mining lease approval has been granted to the company's Irvine Island project which is located about 130 km north of Derby on the Kimberley Coast of WA. The company states that acquisition of the mining lease is a step forward in achieving the project's commercial development. Pluton Resources has announced an initial ore reserves for the Irvine Island project of 143 Mt at 28% Fe. The company now aims to complete the acquisition of data required to gain government approval for the Irvine Island development.

FairStar Resources Ltd: The company has entered into a Native Title agreement with the Central East Goldfields Peoples Native Title Claimant Group and has been granted a mining lease for on-going exploration and production at the its Steeple Hill Iron Project in WA's eastern goldfields. FairStar state that this is a significant milestone for the company's commitment to bring the Steeple Hill project to the production stage. In June 2011, the company has reported new Indicated Resources for Steeple Hill of approximately 136 Mt of hematite at 58% Fe grade.

Golden West Resources Ltd (GWR): Mining approval was received for the company's John William deposit, which is part of its Wiluna West Project. The approval allows the company to mine up to 1 Mtpa for a three year period. GWR has reported a global resource for the Wiluna West Project of 130.3 Mt at an average grade of 60% Fe. Part of this resource is 10.8 Mt at 64.1% Fe for the John William DSO hematite deposit. Effort to secure port access is a priority for the company.

BC Iron Ltd: A significant milestone for the company's Nullagine joint venture with Fortescue Metals was achieved in December 2011 when more than 1 Mt of iron ore was exported to exceed the company's export target. Another target milestone was a production rate of 3 Mtpa which was increased to 5 Mtpa in May 2012, well ahead of the end of June 2012 target. In addition, the joint venture exported approximately 224 000 wet tonnes of iron ore from Port Hedland's Herb Elliott Port, which was its largest ever shipment.

Cazaly Resources Ltd: The company's Parker Range Iron Ore project about 400 km east of Perth has received environmental approvals, clearing the way for its development. The company also has signed an agreement with the Esperance Port Authority for a 5 Mtpa port allocation. However, this agreement is subject to the completion of the port expansion and acceptance by the port operator, Esperance Ports Sea and Land.

Jupiter Mines Ltd: The company reported that JORC Code compliant resources at its Mount Ida Magnetite Project in the central Yilgarn region had increased by 132% to 1.23 billion tonnes at 29.79% Fe. However, 86% of these are Indicated Resources. The resource estimate is based solely on the Central Zone of the Mount Ida deposit and is likely to increase when recent drilling results on the Northern and Southern extensions are modelled.

Quest Minerals Ltd: The company has reported Inferred magnetite resource of 147 Mt at 36.8% Fe for its Feral prospect at the Perenjori Iron Ore Project in the Yilgarn region. An initial scoping study initiated by the company for the Feral prospect indicated a potentially economic 5 Mtpa operation but the company plans more metallurgical testing to confirm a saleable product for the Perenjori project. The company's 2012 Annual Report states that the proposed metallurgical testings and resource drilling will bring the project into a pre-feasibility study stage.

Aquila Resources Ltd: Recent announcements by the company have outlined further planned developments for its West Pilbara Iron Ore Project with a revised total expenditure for the project estimated to be around $7.4 billion. The project development will include an integrated new mine, infrastructure and rail. Stage 1 of the project will involve development of eight mining areas and rail infrastructure as well as feasibility studies for both the Mount Stuart Iron Ore Project and the Red Hill Iron Ore Project, which has already delivered an economically viable project. It is anticipated that the total production for Mount Stuart will be 70 Mtpa of iron ore for mine life of 14 years while it is envisaged that the Red Hill project is expected to produce 289 Mt for a mine life of more than 16 years. Aquila stated that mining lease applications for the Stage 1 mining areas have been lodged with the Western Australian Department of Mines and Petroleum.

Legacy Iron Ore Ltd: The company's Mount Bevan Iron Ore Project in the Yilgarn region initially reported mineral resource of 617 Mt but this has been upgraded to 1.6 billion tonnes at 30.2% Fe for the project's western BIF magnetite target. The company anticipates a large proportion of this Inferred Resources will be upgraded to Indicated Resources after relevant tests, such as geochemical testing, of the phase 3 drilling program samples have been completed.

Dynasty Metals Australia Ltd: During 2011-12, the company completed a scoping study of its Spearhole deposit in the Pilbara region, which confirmed the economic potential of the deposit. The Spearhole deposit occurs within the Prairie Downs Iron Ore Project, located approximately 40 km southwest of Mount Newman. The company reported that, in October 2010, the Spearhole deposit has a JORC Code Inferred Resource of 1.4 billion tonnes of Detrital Channel Iron, adding to the previously announced 23.3 Mt of the Marra Mamba Iron Formation in March 2010. Dynasty Metals is currently focused on seeking solutions for the Prairie Downs Project's infrastructure and on holding discussions with relevant stakeholders in the region.

Winmar Resources Ltd: The company has announced a significant increase in resources at its Hamersley Iron project about 50 km north-northeast of Tom Price in the Pilbara region. The Inferred Resources for the project have increased from 241.6 Mt at 54.3% Fe to 368 Mt at 54.7% Fe, which will be used to update of the project's scoping study.

Iron Mountain Mining Ltd: The company has reported that its joint venture with Red River Resources Ltd, the Miaree Magnetite project, has an initial JORC Code Inferred Resource of 286 Mt at an average grade of 31.36% Fe. The project is located approximately 30 km from Karratha and 70 km from the planned Anketell port.

Dragon Energy Ltd: The company has reported the completion of a major mineral resource drill out for its Rocklea and Nameless deposits, resulting in an upgrade of resources for both deposits, which occur within the company's Pilbara Iron Project. The Rocklea resource has been upgraded to 93.59 Mt at 52.19% Fe with over 84% categorised as Indicated Resources. This brings the overall Rocklea deposits resources, which includes the newly acquired Rocklea and Dragon's Rocklea, to approximately 182.6 Mt. An initial resource of approximately 81 Mt at 52.39% Fe also was reported for the Nameless deposit, bringing the overall mineral resource for the company's Pilbara Iron Project to 263.6 Mt.

Mount Gibson Iron Ltd: The first shipment of hematite ore from the company's Extension Hill Project about 260 kilometres east-southeast of Geraldton occurred during the year. The first shipment of ore from the mine, 61 438 tonnes of ore is being shipped to China The company also says that the Extension Hill Project is moving to an annual production and export rate of 3 Mtpa. In its 2012 Annual Report, the company states that ore reserves for Extension Hill are 12.2 Mt and mineral resource are 19.4 Mt.

Athena Resources Ltd: The company has announced some encouraging assay results from the second phase of its first pass drilling program which was completed in late 2011 at the Byro Iron Ore Project. The assay results were taken from drilling conducted at Byro South, Whitmarsh Find and Whistle Jack magnetite deposits, confirming the magnetic susceptibility reported in late 2011. The company says that the results demonstrate continuity of the high grade mineralisation at these prospects. The company has also reported an initial JORC Code Inferred Resource of approximately 22.8 Mt at 25.6% Fe for its Fe1 prospect, which occurs within the Byro Iron Ore Project, 250 km from Geraldton.

PepiNini Minerals Ltd: The company has reported the results of its drilling program for the Robinson Range Joint Venture project. The program's primary target was to find supergene enriched hematite and hematite-goethite mineralisation associated with banded iron and granular iron formation units of the Robinson Range Formation. Significant intersections, included 24 m at 64.2% Fe from surface and 15 m at 60.7% Fe from a depth of 56 m. Another borehole intersected a 57 m at 56% Fe from 3m including an interval of 33 m from 25 m at 61.8% Fe. The overall outcome of the drilling program has resulted in a JORC Code Inferred Resource of 17.7 Mt at 49.7% Fe for the Area C prospect with a 45% Fe cut-off grade.

Radar Iron Ltd: The company has announced an initial JORC Code Inferred Resource of 2.1 Mt at 57.6% Fe at a cut-off of 55% for its Muldoon prospect at the Johnston Range Iron Ore Project in the Yilgarn region. Radar Iron considers the Johnson range area has significant potential to host numerous hematite enriched deposits and aims to conduct progressive tests in these zones during 2012, with an objective of delineating additional resources. The company claims that the mineralisation at Muldoon deposit is at, or near the surface and making shallow open pit extraction through possible, resulting in a relatively low cost mining and crushing operation.

South Australia

Royal Resources Ltd: The company announced a significant increase in resources for its Red Dragon Venture project as a result of resource definition drilling, mainly from the deposits within the Razorback Premium Iron Project. This included the initial resource for the Iron Peak deposit, bringing the total resources for the Premium Iron Project to approximately two billion tonnes. The company also announced a mining lease proposal to study the Iron Peak, Ironback Ridge and Interzone deposits in the Premium Iron Project, which is part of the Red Dragon Venture.

Iron Road Ltd: The company commenced a definitive feasibility study of its Central Eyre Iron Project. The company also carried out a resource upgrade of the project which increased resources to 2.1 billion tonnes as the result of an ongoing mineral resource expansion program at the Murphy South deposit. The increase includes an upgrade to Indicated Resource of 1.11 billion tonnes.

Minotaur Exploration Ltd: The Company's Muster Dam deposit, which occurs within the Mutooroo Magnetite Project, 100 km southwest of Broken Hill has reported its initial Inferred Resource of 1.5 billion tonnes at a DTR5 grade of 15.2% Fe3O4. Muster Dam is one of numerous prospects within the Mutooroo Magnetite joint venture project with Sumitomo Metal Mining Oceania Pty Ltd and Minotaur.

WPG Resources Ltd: reported resources at the Giffen Well iron ore deposit in the Gawler Craton estimated to be 688.8 Mt at an average grade of 30.9% Fe with a cut-off grade of 15%. More than 62% of the resource tonnage is in the Indicated category, which has a resource estimate of 427.6 Mt at 31.17% Fe. The Inferred Resource component stands at 261.2 Mt at 30.46% Fe. The company has begun a pre-feasibility study of the project.

Arrium Ltd: The company's new Peculiar Knob mine 90 km southeast of Coober Pedy and 600 kms from Whyalla was commissioned and the first iron ore sale was sent by rail to the port of Darwin in October 2012. Arrium says that the Peculiar Knob mine, which is part of the company's Southern Iron operation, will contribute to its plan to increase iron ore exports to around 12 Mtpa by July/August 2013. As part of this expansion, the company is undertaking a $200 million project at its Whyalla port export facility to increase handling capacity from approximately 6 Mtpa to 12 Mtpa.

IMX Resources Ltd: reported a positive result for the company's Snaefell project development concept Study. Proceeding to a pre-feasibility study, additional studies for water, power and other project logistics are needed and are in progress. The company expects the remaining studies to be completed in the near future. The Snaefell project is 12 km from the company's Cairn Hill mine and has a current JORC Code Inferred Resource of 569 Mt at 27.1% Fe at a cut-off of 18% Fe.

Centrex Metals Ltd: The company completed a scoping study for its Fusion Magnetite Iron Project and associated nearby Port Spencer proposal on the Eyre Peninsula 35 km north of Port Lincoln and has proceeded to a definitive feasibility study. Both studies assumed production of between 5 Mtpa and 10 Mtpa and exporting through Port Spencer, which is expected to be operational in 2014. The project capital cost to develop the Fusion project and the associated port facilities is estimated to be between $1.7 billion and $2.6 billion. Centrex announced the first Indicated mineral resource for Fusion's Koppio deposit of 54.5 Mt, which is part of an overall upgrade to Fusion Magnetite Project Mineral Resource estimate to 499.4 Mt.

Havilah Resources NL: Metallugical tests based on a range of industry standard measurement criteria for the company's Maldorky Iron Ore Project have indicated a soft ore, which requires lower power during ore processing, including crushing and grinding. Havilah Resources has reported an Indicated Resource of 147 Mt at 30.1% Fe for the Maldorky project, which is approximately 300 km east of Port Pirie.

Lincoln Minerals Ltd: The company is planning a two stage development for a new iron ore mine at its Gums Flat Iron Ore Project on the southern Eyre Peninsula. Stage 1 includes mining the Burns deposit hematite DSO for export of 0.5 Mtpa for a mine life of three to five years. The DSO includes an upgrade of around 1 Mtpa lower grade hematite-goethite-magnetite to DSO. The company's Annual Report states that the Gum Flat project draft mining lease application was completed, and project planning and background studies, including a community consultation process, is ongoing. Stage 2 consists of mining the magnetite resource for a 10 Mtpa mine capacity over a mine life of approximately 20 years. The magnetite ore will be beneficiated on site to produce approximately 2.5 Mtpa of high grade magnetite concentrate for export through Port Lincoln or Port Spencer.

IronClad Mining Ltd: The company reported that ongoing resource definition drilling at the Wilcherry Hill Iron Ore project, about 40 km north of Kimba on northern Eyre Peninsula, is well underway to further delineate the near surface DSO for low cost mining and ore processing. IronClad Mining states that, in the current economic environment, reduced mining cost of the DSO, and the low cost of other materials suitable for upgrade by dry magnetic separation, will be economically beneficial for the Wilcherry Hill project.

Apollo Minerals Ltd: During 2011-12 year, the company reported an initial resource of 72 Mt grading at 25.9% Fe for the Sequoi deposit within its prospective Commonwealth Hill Iron Project, 90 km to the north of Tarcoola. The deposit is made up of 19.4 Mt at 27.7% Fe Indicated Resources and 52.6 Mt at 25.3% Fe Inferred Resources. Based on a recent ground magnetic survey, there is a potential expansion of the exploration target for the Sequoi deposit to between 100 and 150 Mt grading between 25 and 35% Fe.

New South Wales

Carpentaria Exploration Ltd: The company announced an increase in its Hawsons Iron Project present nett value to $3.2 billion following an update of a pre-feasibility study based on a mining optimisation study. The company states in its Annual Report that the mining option study includes revised mining production schedules, reduced stockpiles and in-pit crushing as well as using a conveying system instead of truck haulage. With a development partner, Carpentaria Exploration plans to launch the bankable feasibility study for Hawsons project this year, it expects to complete within two years. The Hawsons Iron Project, which is located 60 km southwest of Broken Hill, has current Inferred Resource of magnetite of approximately 1.4 billion tonnes at DTR grade of 15.5% Fe3O4 with a 12% cut-off grade.

Tasmania

Grange Resources Ltd: The company reported in early 2012 that it had a 75% increase in the mineral resources at its Southdown Magnetite Project 90 km from Albany, Western Australia. The 1.2 billion tonnes resource increase was the outcome of a definitive feasibility study resource definition drilling program. The company has also revised to 2015 for the anticipated start of the project but has maintained the production capacity of 10 Mtpa for a 14 year mine life. The company has also obtained the final major environmental permit for the project's desalination plant. The company says that with all major permits for the Southdown project in place, the project can initiate the development phase when the current market and economic environment improves.

Shree Minerals Ltd: A pre-feasibility study of the company's Nelson Bay River Iron Project 70 km southwest of Smithton, was completed and reported in early 2012 and confirmed the viability of the project. The company has identified three resource types, which include hematite DSO, Beneficiable low-grade goethite-hematite ore and magnetite ore. The company has reported DSO reserves of 0.33 Mt at 57.4% Fe.

Northern Territory

Sherwin Iron Ltd: An application for a mining lease for the Sherwin Creek Deposit C about 475 km southeast of Darwin was lodged by the company during 2012. The company states that ongoing pre-feasibility study infill drilling has resulted in the 100% upgrade of the Area C deposit Inferred Resources resulting in Indicated Resource of 18.3 Mt. Subject to a positive outcome of the project pre-feasibility study, Sherwin Iron anticipates producing an initial DSO of approximately 3 Mtpa from the Area C deposit.

Western Desert Resources Ltd: A total of five mining leases were granted for the Company's Roper Bar Iron Ore Project about 60 km south of Ngukurr and 50 km from the Gulf of Carpentaria coast. The company also achieved a Native Title Agreement with the Northern Land Council (NLC), Native Title Holders as well as a Load Facility Agreement with Mount Isa Mines Ltd which provides access to an area on Mount Isa Mines Mineral lease at Bing Bong in the Gulf of Carpentaria. Roper Bar Iron has a global mineral resource of 402 Mt at 40% Fe which includes a DSO grade component of 32.1 Mt at 56.8% Fe.

Queensland

Cerro Resources: The company has announced an updated Indicated Resource of 19.11 Mt at an average grade of 41.42% Fe and Inferred Resource of 11.40 Mt at 33.82% Fe for its Mount Philp Hematite Iron Prospect 54 km southeast of Mount Isa. Cerro Resources says that the deposit occurs as a single north-northeast trending iron-rich stratigraphic unit extending over 4 km within the Proterozoic Corella Formation and grades from hematitic quartzite through banded siliceous ironstone and siliceous ironstone into massive hematitic ironstone.

Australia Minerals and Mining Group Ltd: The company has reported an initial Inferred Resource of 6.1 Mt at 39.9% Fe at its Constance Range Iron Ore Project 'D' deposit which is located on the Qld/NT border 180 km northwest of Mount Isa.

Endnotes

4 Agglomeration is the process in which magnetite grains are aggregated into pellets using a chemical binding reagent. Pellets are produced in a pelletising plant.

5 Davies Tube Recovery (DTR) testing is a laboratory technique which uses a Davis Tube to recover magnetic particles from an ore samples. The per cent mass recovery of magnetic material is determined from the mass of sample recovered compared to the sample mass. The recovered magnetic and non-magnetic portions can be analysed for chemical composition (taken from Minotaur Exploration report explanatory notes).