Pilbara iron ore developer Aurox Resources Ltd has appointed engineering and manufacturing giants FLSmidth Minerals Pty Ltd and Siemens Ltd to construct its Balla Balla magnetite project, south west of Port Hedland.
Pilbara iron ore developer Aurox Resources Ltd has appointed engineering and manufacturing giants FLSmidth Minerals Pty Ltd and Siemens Ltd to construct its Balla Balla magnetite project, south west of Port Hedland.
Under the deal, the partners will engineer, manufacture and supervise installation of all major components required to commission Aurox's six million tonne per annum Balla Balla magnetite processing plant and related port infrastructure.
Perth-based Aurox will make an initial payment of approximately $8 million shortly, to initiate detailed engineering work and secure key plant components.
Aurox managing director Charles Schaus said the lump sum contracts had been tendered by both groups, and provide for the scheduled first delivery of concentrate to Port Hedland in the third quarter of 2010.
"Securing lump sum contracts for the plant and port infrastructure is a huge milestone for Aurox and its shareholders," he said.
"It moves Aurox a major step towards our goal of becoming WA's first magnetite producer."
"Having the lump sum contract mitigates the risk of cost blow-outs in the development of the project, and provides further security as we move into the construction phase." Mr Schaus said.
Aurox has also signed a Letter of Intent with Siemens to engineer, manufacture and install all major electrical systems including gearless drives for the grinding mills.
Firm price contracts are being drafted by both groups with execution expected in approximately 30 days.
FLSmidth and Siemens have worked together on numerous projects including the new crushing circuit recently installed at the Cloud Break operation owned by Fortescue Metals Group Ltd.
Aurox is in advanced discussions with other contracting groups for the balance of plant including earthworks, slurry pipeline and Australian Standards supervision.
"The Balla Balla processing plant will be constructed to handle additional capacity, reflecting the company's strategy medium term to ramp up production from our initial six million tonnes target," Mr Schaus said.
The plant will incorporate a gyratory crusher and a SAG mill capable of 10 million tonnes per annum throughput in anticipation of the expansion from 6 million to 10 million tonnes per annum in 2014. A second ball mill will be installed as part of the proposed expansion.
Aurox is well advanced in the development of Balla Balla, having completed a Bankable Feasibility Study for six million tonnes of magnetite iron concentrate production annually.
The company has in place two 15 year sales contracts each for 3mtpa with major Chinese steel companies, whichprovide for future expansion to 10 mtpa of concentrate sales.
