|MinRes plans iron ore spin-off|
|THE WEST AUSTRALIAN|
|Friday, 23 November 2012 13:56|
Mineral Resources plans a spin-out of its iron ore assets within the next two years, according to managing director Chris Ellison.
Over the past three years MinRes has quietly built a substantial iron ore business, expecting to export more than 3.7 million tonnes from its Pilbara and Yilgarn operations this year. That figure will rise to 6mt next year, according to the company, but speaking at its annual meeting in Perth yesterday Mr Ellison said mining services would always remain MinRes' primary business, and its iron ore mines would be on the market at some point.
MinRes exports iron ore from both Port Hedland and Kwinana, and its primary asset is the Carina iron ore mine in the Yilgarn, picked up through the acquisition of Polaris Metals in early 2010.
Port space at Kwinana is limited, however, and Mr Ellison said the timing of the spin-out of its iron ore business could depend on the proposed expansion of the Esperance port.
"I believe that the key to the expansion of the Esperance port is going to be Polaris. Without Polaris there will be no expansion, is our personal view. We think we are the only ones - aside from Cliffs Natural Resources - with the ore to warrant an expansion," he said.
Mr Ellison said MinRes expects its production from the Pilbara to rise in January, when its Phil's Creek mine begins to ship ore.
Though the outlook for other mining services companies has been gloomy, Mr Ellison said MinRes expects a bumper year next year, because its build, own and operate model was more attractive to the bigger miners as they pulled back on capital expenditure.
He said the company would also expand its mining services offerings to engineering, procurement and construction management services.
Mineral Resources shares closed at $8.11 yesterday, up 18 cents.
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