Mineralogy/Macsteel agreement re Pilbara iron ore project welcomed

9/12/98

The Western Australian Government has welcomed an announcement by Macsteel International Holdings BV regarding its negotiations with Mineralogy to purchase steel products from the planned Mineralogy iron ore processing project in the State's Pilbara region.

WA Resources Development Minister Colin Barnett said today that Mineralogy had a substantial magnetite resource at Cape Preston, near Dampier in the Pilbara, which had the potential to be significantly upgraded and become a valuable resource.

"The agreement between Mineralogy and Macsteel is significant and said to be worth approximately $25 billion over a 15 year period," Mr Barnett said.

"I understand that Mineralogy is continuing to seek equity participants in its project but today's announcement is certainly a step in the right direction."

Mr Barnett said the State Government was supportive of the proposed project and if it proceeded, would draw substantial benefits into the area. The Government was close to completing negotiations on a State Agreement for the project.

Macsteel is a joint venture owned by African steel major Iscor Limited and the Macsteel Group of South Africa.

Mr Barnett said the project had the potential to produce up to six million tonnes a year of high grade magnetite pellets, or four million tonnes per year of direct reduced iron, or three to four million tonnes of steel from its Fortescue deposits.

The agreement with Macsteel would provide market access for the steel product, extending the project's value-adding chain from low-grade ore through to steel coil and slab. Media contact: Justine Whittome (08) 9222 9699