Grange: Magnetite project on track

Grange: Magnetite project on track

GRANGE Resources Ltd, a listed Australian mining company, expects to start production of 100,000 tonnes per year of magnetite concentrate in Bukit Ibam, Pahang, by the end of this year.

All statutory approvals for the mining project are in place and work has commenced on the procurement and construction, it said in a recent statement to the Australian Stock Exchange.

Following successful resource drilling, metallurgical test work and viability studies, Grange Resources has announced a joint venture approval to develop the Bukit Ibam magnetite mine in Malaysia.

Grange Resources said the concentrate will be sold on the spot market and shipped out of Kuantan Port.

The company said the pit has been prepared for mining, which is scheduled to recommence in September, and the concentrator is forecast to be commissioned by the end of 2008.

The Bukit Ibam project is located at the former Bukit Ibam iron ore mine in Pahang.

The mine started operations in 1962, producing about 22 million tonnes of haematite and magnetic ore before closing in 1970.

Grange Minerals Sdn Bhd, a wholly-owned Malaysian subsidiary of Grange Resources holds 51 per cent project equity in the joint venture with a privately-owned Malaysian mining company, Esperance Mining Sdn Bhd.

The company expects to fork out A$1 million (RM3.13 million) as capital expenditure for the project.

Grange Resources managing director Russel Clark said this development in Bukit Ibam makes Grange Resources an operator and a producer in Malaysia.

"The payback on capital is rapid and we look forward to capitalising on the current high iron ore prices to generate quick positive cashflow.

"The opportunity to expand in the near future is very real and we will be looking very hard at this with our joint venture partners," he said.

Clark added that Bukit Ibam is a key part of the Grange Resources' strategy to generate funds and develop an increasing mining and exploration presence in Malaysia.

"As part of the much larger Southdown project, Grange Resources proposes to construct and operate an iron ore pellet plant at Kemaman, Terengganu.

"An operational presence at Bukit Ibam and in Kuantan will provide some synergies and help facilitate early development work at Kemaman," he said.