Western Australia to expand Esperance port

The government of Western Australia’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 and in a press release Macarthur Minerals noted the decision to expand the port highlights the potential of the Yilgarn iron ore region to emerge as the second-largest iron ore producing area outside of the Pilbara.

Chairman and chief executive Alan Phillips noted in a statement that he hopes the government will expedite the formal tender process for the port expansion as soon as possible in order that producers in the Yilgarn iron ore district can take advantage of the currently robust export iron ore export margins.

Macarthur Minerals is advancing its Ularring project, 100 km from rail infrastructure with a direct connection to Esperance. Ularring is made up of hematite goethte 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 Minerals completed a positive preliminary economic assessment of Ularring in November last year and expects to finish a pre-feasibility study on Ularring later this year.

In addition to Ularring, Macarthur Minerals’ Moonshine project has an inferred magnetite resource of 1.3 billion tonnes of 30.1% iron. A positive preliminary economic assessment on Moonshine was released in Feb. 2011.

At presstime in Toronto Macarthur Minerals was trading at $1.07 per share within a 52-week band of 80-$4.23. The company has about 44.8 million shares outstanding.