Aurox on track for fine ore production

"It's well located. It's advanced. We've got our contracts signed and we have our own infrastructure," says Charles Schaus, managing director of Australian iron ore producer Aurox Resources.

Aurox's Balla Balla titano-magnetite project, which it acquired in 2005, is closer to beginning operations. Construction is due to start in September and full production is expected by late 2010.

Aurox is focused on producing a high-grade iron concentrate with a high vanadium and titanium content, a material used by specialty steel and vanadium producers in China, such as Chengde Iron and Steel Group.

All of the company's output is already contracted for direct sales to Chengde Iron and Steel Group and the RockCheck Steel Group of China for the first 15 years of production.

Under the contracts Aurox will sell 3 million tons a year to the two Chinese steelmakers for the first five years, then increase its supply to RockCheck from 3 million to 7 million tons.

"We have been working with Chinese steel mills for the past three years and we have very good relationships. They are very accessible, very competent businessmen and they do honor their agreements. We very much look forward to a very long association," said Schaus.

Aurox's project has a predicted mine life of between 25 and 30 years. Based on tests, the mine has over 1 billion tons of ore that can be turned into iron concentrate.

Aside from the amount and grade of the ore, Aurox also has advantages in its 100 percent ownership, excellent location and good infrastructure.

"We are near the coast, near Port Hedland. We have a material that we can concentrate and slurry. We have all the power and gas and we have a road that runs right through our leases," said Schaus.

Aurox is now searching for other sources of titano-magnetite, for which there is not yet huge demand.

"We feel that we are helping develop the overseas market for titano-magnetite," said Schaus.

www.aurox.com.au

(China Daily 08/07/2008 page41)