China’s CITIC Pacific said it is “now moving into the production stage” at its $8 billion iron ore project in Australia, following years of delays at one of China’s costliest offshore mining developments.
Citic Pacific, controlled by the state-owned conglomerate Citic Group, has been commissioning the first of its two production lines for its Sino Iron magnetite project in Western Australia since July according to an e-mailed statement as reported on Reuters.
While the company has internal goals no target date was given for the first shipment of iron ore.
The $US8 billion mine, which is more than $US6bn over its original budget and about four years behind schedule, has been beset by technical and operational issues since it was conceived by Citic in 2006. The project has long promised to become a major source of income for entrepreneur and likely parliamentarian Australian tycoon Mr. Clive Palmer. Once operational, Sino Iron promises to generate hundreds of millions of dollars in royalties to the colourful Queenslander, who sold Citic the rights to two billion tonnes of iron ore in 2006.
One of the largest projects of its kind undertaken by a Chinese entity outside the country, it has been marred by legal disputes.
It has yet to generate any returns six years after Citic Pacific bought the rights from Palmer, prompting Beijing to take a much more cautious approach to approving foreign mining investments.
Citic Pacific said last month the focus over the next six months would be to ensure the stable running of the first production line and ramping it up to full capacity.
The firm had hoped to begin exporting iron ore in May, however problems at its grinding mill, a component in the production of the type of magnetite found in the far west Australian deposits mined by the company forced it to delay.
The development aims to produce up to 24 million tonnes of iron ore concentrate annually. The material will be used by Citic Pacific’s own steel plants and also sold to other steel producers in China.
Citic said the second production line had been running well since commissioning started last Friday, according to The Australian.