UMC 0.00% $1.30 united minerals corporation nl

mine gate sales - lets hope

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    Interesting comments on MGS by Rio with IOH.

    Rio Tinto Hamersley inks iron ore buying pact with Iron Ore Holding
    Rio Tinto through its subsidiary Hamersley Iron has agreed on commercial terms for an innovative mine gate sales arrangement and Iron Ore Holdings Limited. Under the arrangement, Rio Tinto would purchase iron ore from a new IOH mine at Phil's Creek, 90 kilometers from Newman. The proposal requires the approval of the Western Australian Government.

    The release said that “Once the feasibility of developing the Phil's Creek deposit is proven, the mine would be owned and operated by IOH and Rio Tinto would purchase the supplied iron ore and transport it for sale to its customers. IOH would deliver the ore to the Yandicoogina stockyard, where Rio Tinto would assume ownership. The mine would produce an estimated one to 1.5 million tonnes a year.”

    The Phil's Creek deposit comprises 8.3 million tonnes of Indicated Mineral Resources grading 58.1%Fe, which IOH has reported in accordance with the 2004 JORC code 1. The deposit is pisolite ore situated only five kilometers from Rio Tinto's Yandicoogina mine, the largest iron ore mine in Australia.

    Mr Sam Walsh CEO of Rio Tinto Iron Ore said that the agreement was an innovative solution that suited both parties. He said that "This commercial agreement represents an excellent opportunity for Rio Tinto to gain access to extra tonnage, and importantly, in a way that does not jeopardize the efficiency of our fully integrated production system. It also enables IOH to develop a small resource that would face large capital costs on a stand-alone basis and most likely remain undeveloped.”

    Mr Walsh said that "The output from this proposed mine is less than one per cent of our total Pilbara production. With our exponential growth from 220 to 320 million tonnes per year and beyond, and infrastructure expansions possibly preceding mine supply, we can stockpile the ore to capitalise on rail and shipping opportunities as they arise."

    He added that "Importantly, it demonstrates our preferred alternative to the growing demands from Government and industry for access to our rail infrastructure. The agreement is commercially-based and balances the risks for both parties.”

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