Australian Resources & Investment chats to Hawsons Iron managing director Bryan Granzien about the company’s bright ‘green steel’ future.
Hawsons Iron has achieved several key milestones in recent months en route to developing its namesake project near Broken Hill in New South Wales.
The Hawsons Iron project is gaining global attention for its Hawsons Supergrade product which, at 70 per cent iron (Fe), is poised to be one of the highest-grade Fe products on the seaborne market.
Newly appointed chair Dave Woodall announced the Hawsons Iron board’s endorsement of the larger of the two development options for the project in mid-June, paving the way for a project double its size from what had initially been planned.
The company will solely focus on developing the 20-million-tonne-per-annum (Mtpa) option it initially outlined in February, in place of the previously proposed 10Mtpa pathway.
Hawsons Iron managing director Bryan Granzien said electing to pursue the 20Mtpa option was a “very logical” decision for the emerging miner.
“We looked at it from the point of view of a large corporate or large mining company evaluating this project – they would be looking at 20Mtpa without a doubt,” Granzien told Australian Resources & Investment.
“We’ve got 484 million tonnes of concentrate confirmed with potentially more to come, so why would we restrict ourselves to 10Mtpa?”
In late July, Hawsons Iron upgraded the project’s mineral resource to 3.95 billion tonnes at a 12.2 per cent DTR (magnetite recovery rate) for 484 million tonnes (Mt) of concentrate (54Mt measured, 193Mt indicated and 239Mt inferred).
The upgrade was the result of the company’s 2021–22 infill drilling campaign, with a further upgrade expected in the September quarter to report on results from outstanding drilling samples.
Granzien said scale was an important consideration in the decision-making process.
“In my experience in mining, scale is very important,” he said. “Your fixed costs are spread over more volume so normally it would make sense and this project lends itself to that sort of magnitude.
“The transport option (that underpinned the 10Mtpa pathway) still needed a fair bit of work and was limited by rail capacity, which was not a good way to go forward on a project of this scale.”
As part of the 10Mtpa option, the final mineral concentrate would have been transported from the project via slurry pipeline to a rail head site near Broken Hill. It would have then been dewatered and transported on existing rail to Port Pirie in South Australia, which would have required a port upgrade.
The 20Mtpa option, on the other hand, involves the construction of an underground slurry pipeline connecting the project with a new port at Myponie Point in SA.
Underpinning the decision to go ahead with the 20Mtpa option was the execution of a non-binding memorandum of understanding (MoU) with Flinders Ports.
As part of this agreement, Flinders Ports will finance, construct, own and operate the Myponie Point port, reducing Hawsons Iron’s capital requirements in the process.
While Hawsons has been engaged in discussions with Flinders Ports since 2017 – when the PFS was completed – the partnership recently gained significant momentum.
“When we demonstrated to them (Flinders Ports) why 20Mtpa was now a good option for us and why we’d identified Myponie Point, that scale was exactly what they were looking for to underwrite future developments in that transport corridor,” Granzien said.
“That’s what kicked off our discussions at a more enthusiastic and detailed level. And that progressed very quickly to, ‘This is a great fit for both of us, let’s do an MoU and let’s work through a process to consolidate that’.”
Since the Hawsons Iron–Flinders Ports MoU was executed, the two companies have set a timeline through to the development of formal documentation and a legally binding agreement, which will be subject to a successful capital raise.
Hawsons also has signed a two-year option agreement to purchase three contiguous parcels of land suitable for developing an export facility for the Hawsons Iron project at Myponie Point.
“Now that we have identified our port location, planning and detailed design work can continue on the deep-water port facility and the underground slurry pipeline from Broken Hill, including all approvals and land access agreements along the 392km pipeline route.”
“We’re setting up all the mechanisms to be able to communicate and have conversations with the many stakeholders right across that slurry pipeline from the mine to the new port.”
While the 20Mtpa option has proven to be the best development pathway, accommodating greater capacity and a new transport pathway would naturally necessitate a review of the existing schedule.
Much of the reconfiguration derives from the design, approval and construction of the underground slurry pipeline, which replaces the initial rail option.
Granzien said Hawsons and its consultants were actively engaged with the necessary stakeholders ahead of the expected release of the bankable feasibility study (BFS) in December 2022.
“While we’re working together as a wider team, our consultants are working on their specific areas … because there are significant interfaces between the different parts of the BFS,” he said.
“Whether it’s engineering at the mine, the slurry pipeline, the port, the environmental approvals process, access to landholders – all of these things need to come together, and our consultants need to work together to say, ‘If we do this, that’s going to impact on my schedule and my timeline’.”
Like any greenfield project, Hawsons Iron will need to overcome obstacles between now and first production. But with a project of Hawsons Iron’s potential, future demand shouldn’t be a concern.
The ‘green steel’ transition is in full swing, so there’s confidence buyers will be there. As far as Hawsons Iron is concerned, it’s a matter of when, not if.
“There’s not a lot of large-scale magnetite production which you need for green steel and not a lot of high-grade products to reduce carbon in steelmaking,” Granzien said. “And there’s not many projects of our scale emerging in the near term.
“We clearly understand – and many analysts have forecasted – a shortfall in magnetite supply, in high-grade material to help with that green steel evolution.
“And so our product will be in high demand, not only towards green steel, but most steelmakers now have strategies on moving to lower and ultimately neutral carbon.”
Granzien said steelmakers’ net-zero ambitions will necessitate a significant technological change, which will require significant investment on their behalf. Hawsons Iron can be an important partner in this transition.
“With our high-grade material, we’re fundamental to leading, with others, that decarbonisation process,” he said.
“And it’s not just about producing green steel, it’s about producing green products out of that steelmaking process, like cars, for example. Car manufacturers are very serious about their ESG (environmental, social and governance) credentials and that includes carbon-neutral or low-carbon suppliers.”
This feature appeared in the August issue of Australian Resources & Investment.