THE $800M CAIRN HILL MEGA PROJECT
AN $ 800 million expansion of CU- River’s Cairn Hill magnetite operations near Coober Pedy could create up to 1300 jobs, providing another shot in the arm for South Australia’s resurgent mining sector.
The privately owned CU- River Mining Australia has reached a funding agreement with its offtake partner, Chinese steel producer Jiujiang, who will finance new infrastructure to increase output; a 13,000m exploratory drilling program; and development of the Snaefell and Tomahawk projects near Cairn Hill.
Part of the funding would be used for associated infrastructure work, including road and rail upgrades and extensions.
The proposed development timeline would see CU- River triple magnetite production to 3mtpa from two additional pits at Cairn Hill, before ramping up to a 15mtpa production target across an estimated mine life of 30 years.
“In the past year or so we have produced and exported one million tonnes of feedstock to Jiujiang Australia’s parent company in China,” CU- River managing director Yong Gang Shan said.
“Our immediate target starting late 2018 is 3mtpa, rising to 15mtpa when projects that we already have in the pipeline go into production.
“We have received approval for the expansion of Pits 3 and 4 at Cairn Hill, which are the keys for the immediate increase in our production, and a 13,000 metre exploratory drilling program is currently underway to define the resource in pits 1, 2, 3 and 4.”
CU River has committed to using South Australian suppliers wherever possible on the project.
“We will be using South Australian suppliers for goods and services wherever possible, so there is a flow- in effect in terms of secondary job creation and stabilisation,” Mr Yong Gang Shan said.
“The industry standard is that as a general rule, every job in the mining sector creates three support jobs elsewhere.
“We now have offices in Adelaide and Coober Pedy and we are going through a process of recruitment for key positions.
“It is company policy to employ our own people for exploration and mining work, rather than outsource to subcontractors.”
The announcement comes after approval was granted for Iron Road’s $ 4.5 billion Central Eyre Iron Project, which could create about 2000 jobs, and plans by the new owners of the Whyalla steelworks to increase production of iron ore from the Middleback Ranges.
Minister for Regional Development Geoff Brock said this proposed investment in regional South Australia was welcome news for mining workers and businesses.
“This long- life project shows that unlocking the full potential of our magnetite assets can create hundreds of jobs for the Far North and new infrastructure that can boost our export potential,” he said.
Privately- owned CU River is one of two magnetite producers in South Australia and has been operating Cairn Hill since 2016.
In June 2014, Cairn Hill was placed into administration by former owner IMX Resources who was one of the first victims of a free- falling iron ore price.
CU River, which bought the failed mine in April 2015 from the liquidator of IMX, originally intended to extract copper and gold at the site but later switched its focus to iron ore after securing investment from JiuJiang.
“Our immediate target starting late 2018 is 3mtpa, rising to 15mtpa when projects that we already have in the pipeline go into production.”