Xstrata says to start iron ore shipments from Australia

Tue Jun 14, 2011 4:59am GMT

SYDNEY, June 14 (Reuters) - Xstrata Plc will start exporting iron ore concentrate to Asian buyers from Australia on Wednesday as part of a A$589 million redesign of its Ernest Henry copper and gold mine, the company said on Tuesday.

Exports of the magnetite-type material at a rate of 1.2 million tonnes a year are a key component of Xstrata plan to transform the Ernest Henry mine from an open-cut design to an underground one, the company said.

The concentrate is being milled as a by-product of the copper and gold mine's ore, which until now has been discarded among tailings at the mine site.

Magnetite, which accounts for just 1 percent of Australia's total iron ore production, has lower iron content -- around 36 percent versus 61 percent for hematite -- and must be upgraded, typically into pellet form to make it suitable for steel making. (Reporting by James Regan, sourced Thomson Reuters)