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Fledgling Iron ore miner Fenix Resources has moved to become a bulk commodity logistics operator with the purchase of mine, rail and port infrastructure in West Australia's Mid West.
Key points:
- Fenix Resources will purchase mining, rail and port assets for at least $25 million in cash and shares
- The purchase will increase the company's port storage capacity by 400 per cent
- The company plans to work with other miners to become a third-party logistics provider for other bulk commodities, including lithium
Mount Gibson Iron Limited will sell all its Mid-West-based mining and infrastructure assets to Fenix for $10 million and enough shares to secure a 10 per cent stake in the company.
Fenix has operated the Iron Ridge mine north of Cue for three years, trucking products more than 500 kilometres by road to Mid West Ports in Geraldton.
On the mining side, the sale includes 15 million tonnes of ore currently under care and maintenance at the Shine Iron Ore mine east of Mullewa as well as a crushing and screening plant at Extension Hill near Perenjori.
Logistics assets in the sale include rail sidings at Ruvidini and Perenjori east of Geraldton and two storage sheds capable of storing more than 350,000 tonnes of product at Mid West Ports.
Chairman John Welborn said the purchase enabled Fenix to work with other miners to become a third-party logistics provider.
"It's quite exciting for us. If you draw a 100 kilometre circle around Geraldton Port you capture literally more than 100 junior resource projects in various stages of development," Mr Welborn said
"Obviously not just iron ore. We've got other bulk commodities like lithium, potash, silica sands, but base mineral concentrates rare earths - all sorts of exciting things.
"They all need logistics solutions they need to get to market, and most obviously, that's through the port of Geraldton."
Increasing storage
The purchase will increase Fenix's port storage capacity by 400 per cent.
"Currently, those sheds have all been used for iron ore, but we're working with the Mid West Port Authority on other potential bulk commodities."
"The really obvious one, the Geraldton port has is an opportunity to increase its throughput on lithium or spodumene concentrate, given the massive expansion in electric vehicles and the need for that material," he said.
Mount Gibson Iron Limited operated mines in the Mid West for more than two decades before putting its Shine Iron Ore mine into care and maintenance at the end of 2021.
Chief executive Peter Kerr said the sale would free the company up to maximise cashflow from its high-grade Koolan Island iron ore mine in the Kimberley region.
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