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Hope Downs Iron Ore Project The Current Status. 7 th Annual Global Iron Ore & Steel Forecast Conference Perth, 2004. Russell Tipper – Project Director, HDMS. Presentation Outline. Project background Project milestones in 2003 Iron ore supply and demand Project equity participation
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Hope Downs Iron Ore ProjectThe Current Status 7th Annual Global Iron Ore & Steel Forecast Conference Perth, 2004 Russell Tipper – Project Director, HDMS
Presentation Outline • Project background • Project milestones in 2003 • Iron ore supply and demand • Project equity participation • The way forward • Conclusions
Project background Location • Development based on 450 Mt of Ore Reserves at Hope 1 • Ore production ramp-up to at least 25 Mt/a within 5 years • New facilities • Mine and ore processing plant at Hope 1 • 360 km railway to connect the mine to Port Hedland • Stockpiling, wharf and ship loading facilities at Port Hedland
Project milestones in 2003 (i) • Increased Resources and Reserves
Project milestones in 2003 (ii) • Rail route shortened by 13 km with a reduced ruling grade
Project milestones in 2003 (iii) • Rail sharing opportunity emerged • The Supreme Court has clarified the standing of the Hope Downs Project under the 1987 Rail Transport Agreement between the Mt Newman JV and the State • Use of the Mt Newman JV railway will depend on the outcome of commercial discussions with the Mt Newman JV participants adding value to the Project • Project base case remains the construction of a new stand-alone railway from Hope 1 to Port Hedland
Fig 8:12 Schematic elevation of wharf and dredged pocket looking North Project milestones in 2003 (iv) • Reduced dredged volume required for berth
Project milestones in 2003 (v) • Progress with all regulatory issues: • Environment • Land Titles • State Agreement • Native Title
Project milestones in 2003 (vi) • Secured further Letters of Intent from major steelmakers in Asia, including NSC, JFE, SMI, Nisshin and Posco, for greater than 100% of the first five years’ production ramp-up • 90% of tonnage at full production has now been secured • All indications are that current iron ore shortages will continue and that real term prices will continue to increase in the medium term
Project equity participation • High level of interest in participation in the Project from potential investors • Chinese and Japanese steelmakers interested in securing long term supply through equity participation • Kumba and Hancock currently finalising shortlist of potential Hope Downs equity candidates • Information memorandum will be distributed when Kumba and Hancock have agreed the Project’s contractual framework, having regard for the requirements of the State Agreement
The way forward • Kumba and Hancock remain committed to the development of the Hope Downs Project • The next steps are: • Assessment of the rail sharing opportunity • Shareholders to finalise equity participation • Shareholders to arrange debt funding for Project development • Shareholders to secure final Project approval from the State Government and FIRB
Conclusions • The Hope Downs Iron Ore Project: • is based on a large high-grade Marra Mamba ore reserve • has secured support from steel industry participants in Europe and Asia • is technically, environmentally and economically viable • will deliver significant benefits to the WA economy and has the full support of the State Government • is necessary to help satisfy the growth in iron ore demand
Hope Downs Iron Ore ProjectThe Current Status 7th Annual Global Iron Ore & Steel Forecast Conference Perth, 2004 Russell Tipper – Project Director, HDMS