A FORCED shutdown of some Brazilian iron ore mines could boost demand for Australian supplies, Carpentaria Resources managing director Quentin Hill says.
Mr Hill spoke at the South Australian Resources and Energy Investment Conference, noting there had been a major international seaborne supply squeeze .
“Before the Brazil factor, there was already an increasing supply gap in the pellet feed market and shortages in the Middle East particularly but this has been amplified by the Brazilian iron ore sector disasters,” Mr Hill said.
“The global pellet feed market was already in need of new pellet feed mines but the Brazilian impacts have disrupted the overall iron ore seaborne market by between 50-70m tonnes per annum of which 10-15m tonnes per annum of that is for iron ore pellets.”
Mr Hill said the market situation favoured the development of the $1.5bn Hawson’s magnetite pellet project, 60km southwest of Broken Hill, at a time when it is looking to finalise remaining funding to complete the project’s feasibility study.
Wood Mackenzie has reportedly rated Hawsons as the leading project of its type in the world, a rating Mr Hill said only could be enhanced by the severe and likely prolonged supply disruptions out of Brazil.
Final project costs are expected to depend on whether Carpentaria selects Port Pirie or Whyalla as the final export outlet.