Sinosteel ships first DSO from restarted Blue Hills iron ore project

Sinosteel Corp. has sent the first iron ore shipment from its restarted Blue Hills direct shipping ore operation in Western Australia to China almost six years after the project went into care and maintenance, the company's Sinosteel Australia Pty. Ltd. unit told S&P Global Market Intelligence.

The Ocean Thyme bulk carrier departed from Geraldton Port on Feb. 12 with 60,000 tonnes, and shipping data shows it is headed for Qingdao Port in China's Shandong province.

The restarted Blue Hills operation aims to process around 3 million tonnes of DSO in total over the next three years, directly employing more than 100 people.

Stage one went into care and maintenance in 2015, according to Sinosteel's website, while stage two, the Mungada East Extension project, was approved by the West Australian environment minister and is currently undergoing assessment of mining and environmental plans by state regulators.

Sinosteel is still focused on securing a major iron ore company to jointly develop the long-delayed A$9.7 billion Jack Hills iron ore mine, expansion, and planned rail and port facility which it bought from Mitsubishi Corp. in 2019.

The shipping milestone came amid renewed investment interest in DSO operations of late, with Jupiter Mines Ltd. successfully spinning out its Central Yilgarn iron ore assets in Western Australia through newly created company Juno Minerals Ltd. in a March 11 ASX listing.

Fenix Resources Ltd. also announced in December 2020 that production was underway at its Iron Ridge DSO deposit in Western Australia.

Fenix said on Feb. 19 that the maiden shipment of Iron Ridge's product was finally dispatched, albeit with a reduced cargo, after mechanical issues resulted in a minor oil spill at Geraldton Port.

The average grade of lump and fines product loaded onto the vessel was 63.3% and 61.5%, respectively.

Fenix said that high grade iron ore from such DSO projects "attracts a premium price on the seaborne market as Chinese steel works increasingly demand more pure inputs with lower emissions due to increasingly strict government regulations."

The surge in interest in DSO projects comes amid hopeful expectations for iron ore prices.

BHP Group's latest commodities outlook issued in February that the "normalization process" of the currently constrained Brazilian exports "could be a multi-year event."