Mineral Resources (MinRes) is buying up iron ore ground in the Goldfields region of WA to buttress existing operations.
Polaris Metals, a subsidiary of MinRes, purchased $1.5 million worth of iron ore rights from ASX junior Aurumin. The sale covers four exploration tenements at Aurumin’s Mt Dimer exploration project.
The sale also includes a $1 per tonne royalty on iron ore exports.
Mt Dimer was historically mined for gold, producing over 125,000 ounces of gold during its lifespan. It was last commercially mined in 1997.
The appeal for MinRes lies in the ground’s prospectivity for iron, as well as its proximity to the miner’s Carina mine, which forms part of the greater Yilgarn iron ore hub.
In the September quarter, MinRes increased iron ore production by eight per cent to 4.8 million wet metric tonnes. The latest acquisition of exploration land will boost the company’s iron ore portfolio even further.
It comes at an interesting time for the commodity, which recently reached an 18-month price high.
According to Mysteel, the price for 62 per cent seaborne Australian iron ore fines at the port of Qingdao had been hovering above $US130 per dry metric tonne (dmt) between November 14–22. It rose to an 18-month high of $US135.5 ($206.6)/dmt on Wednesday.
However, this was scrutinised by China’s National Development and Reform Commission (NDRC) and other Chinese regulators, which shook market confidence. The price of iron ore subsequently dropped $US1.5/dmt to $US134 ($204.4)/dmt.
Mysteel said “market optimism was cooled by Beijing’s vow to further tighten market supervision”.
Subscribe to Australian Resources & Investment and receive the latest news on commodity prices, resource developments, executive movements and more.