Feasibility study financed into third direct reduced iron plant for Pilbara

31/5/95

Resources Development Minister Colin Barnett has welcomed the securing of finance for a feasibility study into Western Australia's third direct reduced iron plant for the Pilbara.

Mr Barnett said Australian United Steel Industry Pty Ltd (AUSI) had today confirmed that companies to take part in the study would include gas producer Ampolex Limited, German electric arc speciality steel-makers Georgsmarienhutte GmbH and Bernville Pty Ltd, together with AUSI founders Sir Russel Madigan, Sir Roderick Carnegie (former CRA and Hamersley executives) and Professor Ross Garnaut (former chairman of BankWest).

The Minister said plans to construct a billion-dollar direct reduced iron (DRI) plant at Cape Lambert in the Pilbara would take advantage of Asia's intense interest in the DRI process, which provided a form of iron highly sought after by electric arc furnace steel makers.

He said the Government would prepare a State Agreement for the project during the feasibility process.

The Department of Resources Development had been working with AUSI to facilitate the approvals process, including such issues as land access, as well as access to rail and ports, water and the source of iron ore.

An environmental review was underway and Aboriginal heritage surveys were also being carried out.

The AUSI project would involve a concentrator plant, a pellet plant and a DRI plant capable of producing almost three million tonnes of hot briquetted iron a year for export.

The Minister said AUSI hoped to complete its feasibility study, at a cost of $5 million, by the end of this year.

The Department of Resources Development had also carried out a preliminary investigation of possible sites west of the township of Wickham, which could be suitable for a DRI plant.

"Subject to required approvals and a commitment by the company to proceed, construction is expected to start about mid-1996, with the plant due to start production by mid-1998," Mr Barnett said.

"The deregulation of the energy market, which has resulted in the halving of gas prices in the Pilbara, has been the catalyst for this new wave of processing proposals." 

The Minister said AUSI's proposed plant was also in response to the findings of a DRD study in 1993 which outlined potential feasibility of a DRI plant in the Pilbara.

Media contact: Carolyn Vicars - 222 9699