REGIONAL NEWS - AUSTRALIA/OCEANIA

Engineering and Mining Journal, Oct 2007

Rio Tinto, Hancock Give Green Light for Hope Downs

Rio Tinto and joint venture partner Hancock Prospecting will spend $350 million on a fast-tracked expansion of the new Hope Downs iron ore project in the Pilbara region of Western Australia. At the completion of the expansion, expected by early 2009, the mine will have a capacity of 30 million mt/y. Work on the initial 22-million-mt/y project commenced in April 2006 at a cost of $1 billion with first production expected by early 2008.

Rio Tinto Iron Ore Chief Executive Sam Walsh said: "The rapid expansion of Hope Downs is an integral part of our plans to lift annual iron ore production in the Pilbara to 220 million mt by early 2009. Thanks to continued strong market conditions we have been able to bring this highly value accretive expansion forward by one year. We are currently investigating other opportunities to increase our Australian iron ore business to about 320 million mt in the future."

Hope Downs is a high-grade Marra Mamba type iron ore deposit. It will contribute to the Pilbara Blend, a new product that was first shipped in July and comprises Brockman and Marra Mamba ore extracted from nine of Rio Tinto Iron Ore's 11 mines in the Pilbara.

Prairie Downs Begins Feasibility Study Tor Zinc Project

Perth-based Prairie Downs Metals has commenced a Bankable Feasibility Study for the Prairie Downs zinc project, commissioning Abesque Engineering & Construction to design a 300,000 mt/y processing plant with the capability to expand to 1,000,000 mt/y.

Priarie Downs said Abesque specializes in the provision of engineering design, construction and project management services to the resource sector including processing of zinc ores. The most recent examples are the construction and commissioning of the Jaguar base metals project and the engineering of the Angas zinc project, which is also currently under construction by Abesque.

The study, which includes design of the process, plant and all related equipment, follows on from a high level scoping study competed in May this year. It will take approximately six months to complete with construction expected to take a further 12 months.

According to the company, drilling is continuing at Prairie Downs and results to date indicate that the current resource of 4.9 million mt is only limited by drilling and, as drilling is expected to continue for the rest of the year and recommence early in 2008, it may increase in both tonnage and grade. The target is 10 million mt.

The company released an updated mineral resource estimate in late August, reporting 4.9 million mt at a grade of 5.4% zinc, lead and 14 g/mt silver at a nominal lower cut of 1% zinc. This resource contains 269,000 mt of zinc metal, 97,000 mt of lead and 2.3 million oz of silver. It includes a subset of 2.5 million mt at a grade of 7.3% zinc, 1.8% lead and 17 g/mt silver at a lower cut of 4% to 6% zinc. This resource contains 179,000 mt of zinc metal, 45,000 mt of lead and 1.4 million oz of silver.

The Prairie Downs zinc project comprises two Exploration Licenses and is located approximately 100 km southwest of Newman in the Eastern Pilbara, Western Australia. The primary focus at Prairie Downs is high grade zinc-lead-silver deposits in the vicinity of the Prairie Downs Fault, which is a major regional structure.

Zinifex to Process Que River Zinc Ore at Rosebery

Zinc and lead producer Zinifex, based in Melbourne, Australia, said it has taken steps to improve utilization of its mill and concentrator at its Rosebery mine by entering into an ore sales agreement with Bass Metals to purchase ore from the first stage of the Que River base metal project.

The agreement allows Zinifex to purchase 120,000 mt of ore from Bass Metals over approximately two years at an average of 8.3% zinc metal content. There is a further option to extend this agreement subject to the approval of both parties.

Zinifex COO Brett Fletcher explained that recent changes to the concentrator have improved its operation and efficiency to the point where its throughput now exceeds the capacity of the mine. "With improved operations in the mill we are now in a position to process a greater amount of ore so we approached Bass Metals earlier this year to explore sourcing product from their Que River site some 30 km from Rosebery. The agreement enables us to potentially put additional material through the mill and, as a result, get better asset utilization at the mine," he said.

A trial shipment of approximately 1,000 mt was undertaken this summer to test the suitability of the ore. This trial was suecessfully completed and Bass Metals was expected to begin delivery of the contracted tonnage as soon as practicable.

Zinifex said that under the agreement, it is expected that Bass Metals will deliver more than to 115,000 mt of Que River ore over a two-year period at approximately 7,000 mt per month. This will bring the total tonnage processed at the mine to over 800,000 a year.