Australian iron ore minnow FerrAus is working towards becoming a 2 million tonnes a year producer by 2011. Most of this ore will be mined from its Robertson Range and Davidson Creek projects, in the East Pilbara region of Western Australia. The company has other projects that bring its total potential to an estimated 166 million tonnes a year.
It hopes to emulate fellow Australian iron ore major Fortescue Minerals, which initially also began as a minnow and is now close to the size of South African iron ore major Kumba Iron Ore, however, a lack of funds has put a damper on its growth aspirations.
The emergence of FerrAus comes at a time when there is a need for diversification in the worldwide iron ore market. The international community reacted strongly to a proposed merger between iron ore giants BHP Billiton and Rio Tinto, citing the potential of the companies to monopolize the iron ore supply market.
FerrAus's positioning in Western Australia means that the company has ample opportunities to export its product. All projects are less than 160 kilometers away from rail infrastructure that will transport ore to three export ports on Australia’s north western coast.
FerrAus is not the first company to try to develop the Pilbara region. Pallinghurst’s small iron ore opportunity is being developed in the central Yilgarn region of Western Australia, where rail and port logistics are already in place, unlike in the Pilbara, where the company would have had to establish its own rail and port links at considerable cost.
