FMG signs landmark deal to create Australia’s first Aboriginal owned and operated iron ore mine
Fortescue Metals Group is trying something new. The iron ore miner announced earlier this week it had struck a deal with Australian Aboriginal Mining Corporation Pty Ltd (AAMC) to create the country’s first Aboriginal owned and operated iron ore mine.
“Today’s agreement underlines very clearly Fortescue’s commitment to provide meaningful opportunities for Aboriginal business development. The company is focused on building up Aboriginal communities through full economic participation rather than passive welfare,” said Fortescue CEO Nev Power.
The five-year “Iron Ore Sale and Purchase Agreement” will allow AAMC to transport upwards of two million tons of iron ore annually from its Pilbara mining operations through Fortescue’s port or rail facilities. The deal gives FMG the option to either purchase iron ore directly from AAMC or act as an agent on behalf of the company to sell it.
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AAMC chairman, Daniel Tucker, described the deal as, "an important step for the continued advancement of Aboriginal peoples in the Pilbara that will see them sharing in the wealth that is generated on their traditional lands."
According to Tucker, the mine development for AMMC hinges on the price of iron ore and the company would develop projects, “as soon as the prevailing commercial environment is supportive.” Iron ore is currently hovering around $55 a ton.
"If they can't get it going at that price, obviously they have quite a few costs to get over," said resource analyst Treadgold.
"They probably need a US dollar price in the $70 to $80 range, to arrange the funding to develop the mine.
"So there are hurdles to clear, they need capital to develop the mine.
"It looks like FMG will be providing a lot of the essential services, so it is a deal that can happen but it has a way to go."
Treadgold added, "It is a socially important announcement, not a financially important announcement.
With a workforce comprised of 13 percent Aboriginal, with another 1000 Aboriginal people working for the company as a contractor, Fortescue Metals Group is actively involved in incorporating Aboriginal people into mining. The company also recently launched a new program called "Trade Up" to further increase the number of qualified Aboriginal people in its workforce.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.