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Miner Mount Gibson Iron has announced it will spend nearly $100 million rebuilding a collapsed seawall in order to restart production at the remote Koolan Island mine.
The news has been welcomed in the West Kimberley, where hundreds of jobs have been lost in recent years due to a string of mine closures.
Mount Gibson chief executive Jim Beyer said the company had decided the cost of rebuilding the wall was worthwhile.
"It's a very high-grade operation and very exciting for us," he said.
"It is a lot of work and nothing of value comes cheap as they say ... but in this particular case, we have been able to keep the restart costs of the island mine under $100 million.
"It has a very low cost on a per-unit basis, and the other exceptional thing about it is very high-grade ore, so it gets a premium well above the spot iron ore price, which is also great news."
The junior miner secured an $86 million insurance payout after the island's seawall collapsed in 2014, flooding the iron ore pit with seawater.
Production was immediately halted and about 300 workers were laid off.
The rebuild will involve construction of a new seawall, this time built around a 467 metre cement seepage barrier.
It is expected the build will take about two years, with 80 jobs created initially, and 315 once production is up and running.
Jim Beyer said the drop in the iron ore price in recent weeks had not spooked the company.
"We're confident we have a good robust business here that once it starts producing, will produce for at least 3.5 years," he said.
"That's for around 13 million tonnes of ore, and there's another 7 million tonnes we think we should be able to get, but we have not finished the geo-technical to get us the confidence that we can do that safely — we're expecting to finish that in the next 12 months."
Derby-West Kimberley Shire President Elsia Archer said it was great news, not just for the town of Derby.
"Hooray, at last. That's my first reaction, because it'll be really great for businesses in the region that have been hurting," she said.
"Someone just sent me a text message saying 'Thank God',"
The island mine is 140 kilometres north of Derby, and when operating saw barges running daily from the town's wharf to deliver supplies, staff and fuel.
Ms Archer said the announcement was significant as it might create the passenger numbers needed to restart a local flight service to Perth, which was shut due to the mining downturn in early 2016.
She said the Koolan Island mine would likely be staffed by a mix of local and Perth-based workers.
"A lot of people from Broome and Derby and surrounds have worked out there in the past," she said.
"It's not all fly-in, fly-out, but FIFO is actually good for us because it might give us the numbers needed for the commercial flights to restart."
Construction is due to begin on the new seawall in June.
Topics: mining-industry, mining-environmental-issues, iron-ore, mining-rural, wa, koolan-island-6733
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