Western Australia to expand Esperance port

The Western Australian government’s decision to expand capacity at the Esperance port will benefit companies like Macarthur Minerals (MMS-T, MMSDF-O) and others active in the emerging iron ore sector in the Yilgarn area.

The expansion project, which is expected to cost roughly $300 million, is expected to lift export capacity potentially by up to 20 million tonnes a year in a staged plan. The port’s existing export capacity is about 11 million tonnes. 

Australian media reports estimate that about 12 million tonnes of iron ore are produced in the Yilgarn province each year. In a press release Macarthur noted the decision to expand the port highlights the potential of the Yilgarn region to emerge as the second-largest iron ore producing area outside of the Pilbara.

Chairman and CEO Alan Phillips noted in a statement that he hopes the government will expedite the formal tender process for the port expansion so that the Yilgarn iron ore producers can take advantage of the currently robust export iron ore export margins.

Macarthur is advancing its Ularring project, sitting 100 km from rail infrastructure with a direct connection to Esperance. Ularring hosts hematite goethite potential direct shipping ore.

On Jan. 24 the company increased the indicated hematite resource at Ularring by 51% to 13.01 million tonnes grading 55.2% iron and inferred resources by 3% to 16.95 million tonnes of 55.6% iron.

Macarthur completed a positive preliminary economic assessment (PEA) on Ularring last November and expects to finish a prefeasibility study for the project later this year.

In addition to Ularring, Macarthur’s Moonshine project has an inferred magnetite resource of 1.3 billion tonnes of 30.1% iron. A positive PEA on Moonshine was released last February.

Macarthur Minerals closed at $1.10 on Jan. 24. Over the last year the company’s shares have traded within a range of 80¢-$4.23. It has about 44.8 million shares outstanding.