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Macarthur Minerals step closer to Lake Giles Iron Project development with Commercial Track Access Agreement proposal

Under the proposal, Arc Infrastructure and Macarthur will work together to negotiate and agree the terms of an agreement under which Arc would provide sufficient capacity on its network to support the Macarthur task.

Macarthur Minerals Ltd - Macarthur Minerals a step closer to Lake Giles Commercial Track Access Agreement with Arc Infrastructure proposal
The proposal provides certainty to support Macarthur’s feasibility study for the Lake Giles project

Macarthur Minerals Ltd (ASX:MIO) has moved closer to developing the Lake Giles Iron Project in Western Australia after fielding a proposal that provides an agreed pathway to develop a Commercial Track Access Agreement (CTAA) for below rail capacity.

The proposal is from Arc Infrastructure and Macarthur has worked collaboratively on developing this, which is a material step forward in bringing the company closer to securing a fully contracted below rail route to market.

Working towards CTAA

Both parties have agreed to work together in good faith to negotiate and agree the terms of a CTAA under which Arc would provide sufficient capacity on its network to support the Macarthur task.

This also includes indicative track access pricing based on an agreed set of operational parameters that would be incorporated into the CTAA.

The proposal will provide sufficient certainty to support Macarthur’s feasibility study for the Lake Giles project, as outlined in the Preliminary Economic Assessment report prepared and released in June 2019.The parties

“Important step forward”

Macarthur president and executive chairman Cameron McCall said: “The proposal received from Arc Infrastructure delivers the most substantial step forward for Macarthur in the last decade towards securing fully contracted train paths on the Kalgoorlie to Esperance rail line.

“This is an important step forward for the region too.

“Seasoned players understand that despite the current buoyancy in global iron ore prices, the memory of past commodity cycles should leave no doubt that the future of sustainable and secure employment in Western Australia’s Goldfields region must be built upon both product and customer diversity.”

Focus on engagement with Southern Ports

McCall added that with a substantial body of exploration work having been undertaken, and an analysis nearing completion to upgrade the magnetite resource to a measured and indicated category, it was pleasing to see critical pieces starting to come together.

“Management will now turn its focus to furthering the company’s engagement with Southern Ports to progress unloading infrastructure and ship-loader capacity options at the Port of Esperance.”

The company is continuing to progress discussions in the following areas:

  • To secure an above rail haulage agreement;
  • To finalise arrangements for the design, development, and funding of unloading infrastructure that will avoid current unloading infrastructure constraints at the Port of Esperance; and
  • To secure rights to develop a 300,000-tonne iron ore storage shed and access ship-loader capacity at the Port.

Macarthur’s progress towards securing a route to market for its Lake Giles Iron Project was recently bolstered by an announcement in late June of the lodgement of applications with the Department of Mines, Industry, Regulation and Safety to develop a haul road and rail siding near Lake Giles.

Union support

The successful development of the Lake Giles Iron Project and the export of its high-grade magnetite through the Port of Esperance is fully supported by the Western Australian Branch of the Australian Rail, Tram and Bus Union (RTBU) and the Western Australian Branch of the Maritime Union of Australia (MUA).

RTBU WA Branch secretary Craig McKinley said: “This is great news and a significant advancement on a very exciting project.

“As a rail union, we are proud to have a role in the jobs and prosperity this project offers - well done to all.”

MUA Assistant Branch Secretary Jeff Cassar said: “The Maritime Union of Australia welcomes this development bringing us one step closer to achieving long-term job security for Esperance port workers, and a much-needed injection into the local economy.

"This is the most exciting initiative for the Port of Esperance that has occurred in the last 20 years and the potential for stability this represents is absolutely massive for this rural port community.”

"Serious commitment"

McCall said: "Macarthur’s proposal to provide firm take-or-pay commitments for the transport and handling of its iron ore through to the Port of Esperance is underpinned by a belief that our company can play an important and responsible role in providing a critical counter-balance to potential disruptions to the production, transport and shipment of iron ore products in the more volatile <60% iron market.

"Macarthur’s approach, therefore, demonstrates the serious commitment that it intends to make to support the future businesses of transport infrastructure service providers in the region (both rail and port).

"This can only be good for the future of jobs in Western Australia and for State Government royalties.

"It is pleasing that both the RTBU and the MUA also strongly support this approach.

"This is another positive step forward for Macarthur in what has been a prolific 12 months of important milestones for the company.

"We look forward to continuing our productive relationship with Arc as we move forward to delivering this important project for our shareholders and for Western Australia.”

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