WhyWhy Investing in Australian Iron Ore Investing in Australian Iron Ore Exploration?Exploration?
Hope Downs and BeyondHope Downs and Beyond
Presentation to Australian Iron Ore and Steel Summit 2002
Parkroyal Darling Harbour, Sydney30 - 31 October 2002
by Tad Watroba - Director, Hancock Prospecting Pty LtdHancock Prospecting Pty Ltd
•• Why not?Why not?• • Success of Rio Success of Rio TintoTinto, BHPB, Robe River and others, BHPB, Robe River and others• Benefits to Western Australia and to the nation• Benefits to Western Australia and to the nation• How has it happened• How has it happened• Hard road to Hope Downs• Hard road to Hope Downs
Hancock Prospecting Pty Ltd
Why Investing in Iron Ore Exploration?
•• Development of towns, ports, railways, roads etcDevelopment of towns, ports, railways, roads etc• • Royalties and taxesRoyalties and taxes
Hancock Prospecting Pty Ltd
Benefits to Western Australia and to the nationto Western Australia and to the nation
Western Australian Iron Ore Royalty Receipts
Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
A$ M 145 151 158 139 153 154 182 235 205 233 286
• Australian Balance of Payment• Australian Balance of Payment
• Jobs, jobs, jobs• Jobs, jobs, jobs
Pioneering Family of the North West:•Pastoralists since 1860’s•Mineral exploration since early 1930’s
Lang Hancock ‘father’ of the Pilbaradiscovers vast quantities of iron ore in 1950’s, 1960’s & 1970’s Hancock Prospecting earns mining royaltiesContinued exploration for iron ore and Hancock is the only other holder of significant iron ore reserves in the Central Pilbara outside Rio Tintoand BHPB
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- SummarySummary
June 10 1909 Langley George Hancock born in Perth to George and Lillian HancockAugust 4 1947 Langley George Hancock and Hope Margaret Nicholas married
November 22 1952 Discovery flight with wife, Hope Hancock, whilst flying from their Nunyerry mine to Perth1953 Returning to discovery area, landing in spinifex and collecting samples for more than 50 miles and sending to Perth for analysis. After analysis, realisation he had found an iron ore zone of possible world significance
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Flying ProspectorFlying Prospector
Hancock Prospecting Pty Ltd
1955 Established family company, Hancock Prospecting Pty Ltd (HPPL), now run by his daughter Gina Rinehart
1953 – 1960 Lobbied for lifting of Iron Ore export embargo by Federal Government.
• Continued exploration• Established committee for North West development with pastoralist friends Frank Thompson and Bill Leslie and proposed and lobbied for tax incentives, with the provision that monies be reinvested in the North West
1960 Export embargo on Iron Ore lifted
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1960 – 1961 Lobbied for lifting of State embargo on pegging for Iron Ore.Together with partner E.A Wright of WPPL, endeavoured to interest Steel Mills and mining houses to invest in Hancock’s Pilbara discoveries
1961 State embargo on pegging of Iron Ore lifted
1961 Pegging of Iron Ore areas discovered by Lang Hancock with team on ground headed by cousin Bill NewmanHosted the visit of Val Duncan, Chairman of Rio Tinto, London, and other Senior Executives
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1961 – 1962 Together with E.A Wright, negotiated agreements with Rio Tinto for the purpose of furthering development of Hancock’s discoveriesHosted the visit of Tom Price of Kaiser Steel, USA, which brought in the involvement of Kaiser Steel into what became the new company, “Hamersley Iron”Increased exploration efforts with Dr Bruno Campana of Rio Tinto Australia, and mapping of the entire Hamersley Iron ProvinceIdentified and named “Campana’s Horizon” (also known as “Bruno’s Band”)
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Hancock Prospecting Pty Ltd
Bruno’s BandBruno’s Band
1962 Hosted the visit of Dr Muraoka and staff from Marubeni, Japan, utilising Hancock’s “Hamersley Station” as headquarters for Marubeni’s, and Hancock’s continuing exploration effortsThe exploration report of Dr Muraoka brought the Japanese Steel industry’s interest into the Pilbara
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Dr Dr Muraoka Muraoka and Lang Hancockand Lang Hancock
Hancock Prospecting Pty Ltd
1963 – 1964 Arranged and hosted the visit of the world’s then richest man, Daniel K Ludwig, and interested him in presenting a cost saving proposal to the West Australian government for the building of a large central port and unified railway system to service the entire Pilbara Iron Ore region, to enhance the region’s competitiveness.
1966 Tom Price commissioned, and Port and town of Dampier established
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1966 – 1971 Brought Hamersley Iron Executives to Paraburdoo and interested them in developing ParaburdooSought to interest Texasgulf of USA, CSR, MIM, Utah, and Consolidated Goldfields into participation in Hancock’s and Hanwright’sexploration teams
1969 Established with WPPL the Sunday newspaper “The Sunday Independent”
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1970 - 1971 Hanwright explored with the co-operation of Mr Hancock’s brothers’ in law Jim and Bill Nicholas, and friend Don Rhodes, the West Angelas, which Mr Hancock named after E.A. Wright’s daughter, but these areas were then confiscated by the West Australian government, and later given to a competing company
1972 HPPL and WPPL established with Texas Gulf the Iron Ore (Rhodes Ridge) Agreement with the West Australian government
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Rhodes Ridge JV with Texas GolfRhodes Ridge JV with Texas Golf
1972 HPPL and WPPL established with the Iron Ore (Wittenoom) Agreement with the West Australian governmentHPPL and WPPL established with MIM, Utah and Consolidated Goldfields the Iron Ore (McCameys) Agreement with the West Australian government
1973 Paraburdoo Commenced production
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1974 Established the nationwide “National Miner” newspaper•Gained jet pilots license at age 65, and acquired first Lear Jet and utilised for overseas visits to promote Australian mineral developments, and to show executives, politicians and others the Pilbara’spotential
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1975 Arranged and hosted the visit of close friend, and Premier Joh Bjelke-Petersen and party to the Pilbara, and promoted the establishment of a railway line across Australia linking the Pilbara’s Iron to Queensland’s coking coalAfter years of worldwide effort with Marandoo, and completing the feasibility study, received “Letter of Interest” from Nippon Steel, allowing Nippon Steel to participate up to 1/3 in the Marandoo project.
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Hancock Prospecting Pty Ltd
Premier Joh Bjelke-Petersen Visit
1979 Wrote and released first book “Wake Up Australia” (launched on June 10 by Premier Joh Bjelke-Petersen and his daughter Gina, in his absence due to ill health) on “Wake Up Australia” jumbo jet tour of Australia’s mineral assets and potential
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
WakeWake--up Australia Flightup Australia Flight
Wake up Australia FlightWake up Australia Flight
1987 Achieved government support for infrastructure sharing for the McCamey’s project by way of a State Agreement with BHP to allow third parties to access their railway
1989 - 1991 Achieved first tonnage to be mined at McCamey’s Monster, first Hancock’s own iron ore mine in production
1992 March 27th, passed away unexpectedly, despite strong will to live, his daughter Gina Rinehart takes over HPPL
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Hancock Prospecting Pty Ltd
The Man of IronThe Man of Iron
1992 December - HPPL achieved the Iron Ore (Hope Downs) Agreement with the state Government1993 Mrs Rinehart hosted visit by Premier Mr Richard Court, and party to Pilbara1993 June 10th, a new planet, discovered by Dr Candy, named in permanent honour of Lang Hancock
1994 Marandoo commenced production
1997 Pre-feasibility study for Hope Downs finalised and bankable feasibility study commenced
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
1998 29th January announcement of participation ofIscor Limited to develop the Hope Downs Iron Ore Project with Hancock Prospecting Pty Ltd
1999 June 10th Naming of Hancock Range in the Pilbarain honour of Lang Hancock and the Hancock family, and their pioneering history in the North West region
2000 Established program with the Notre Dame University to commence the Hancock Free enterprise lectures
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- HistoryHistory
Mining•Hope Downs•Joint Venture Partner in Rhodes Ridge (25%) with Rio Tinto•Objective:- to be Australia’s 3rd iron ore producer•Other Iron Ore Tenements (East Angelas, Roy Hill, MulgaDowns and others)•Coal•Ferruginous Manganese
Other Interests•Pastoral •Property
Hancock Prospecting Pty Ltd
Hancock Group Hancock Group -- Position TodayPosition Today
Hancock Prospecting Pty Ltd
Location MapLocation Map
1971 Pacminex exploration (19 holes)
1985 Geological Mapping
1987 RC drilling programme
1988Low level aeromagnetic survey
1991100m decline Diamond drilling Preliminary metallurgy
Hancock Prospecting Pty Ltd
Hope Downs ProjectHope Downs Project
1992 Initiated environmental studies30,000m of RC drilling730m diamond drillingHope South discoveryHope Downs Iron Ore Agreement Act
199360,000m RC drilling programme5 winzes sunk in Hope North & South2400m diamond drill corePermanent camp established
Hancock Prospecting Pty Ltd
Hope Downs ProjectHope Downs Project
19947 winzes sunk in Hope North & SouthMetallurgical testwork commenced at AmmtecGeotechnical studies Hope North & South3D interpretation & Orebody Modelling of Hope North
1995Mine Planning for Hope North3D interpretation & Orebody Modelling of Hope SouthFurther metallurgical testwork CISIRI, British Steel
Hancock Prospecting Pty Ltd
Hope Downs ProjectHope Downs Project
1996Mine Planning for Hope SouthCSIRO and MPL metallurgical testworkMarketing Documentation
1997MarketingExploration of Hope 2 and 3Continuation of Pre-feasibility StudyDiscussions with Potential Partners
Hancock Prospecting Pty Ltd
Hope Downs ProjectHope Downs Project
Hancock Prospecting Pty Ltd
Hancock andHancock and IscorIscor Agreement for Hope DownsAgreement for Hope Downs
Tenements 100% owned by Hancock GroupTotal Delineated resource for Hope Downs 1, 2, 3 and EastAngelas (Not part of the agreement with Kumba) exceed 1,200 MtExtensive pre-feasibility work by Hancock had proceeded for over 6 years (total spent exceeds $25 M)Drilling, geology, mine planning, metallurgy, engineering, environmental, native title and heritage studiesHope Downs 1 comprises two deposits - North & South with scheduled recoverable reserves over 400 Mt
Hancock Prospecting Pty Ltd
Hope Downs Project Status after Signing withHope Downs Project Status after Signing with IscorIscor
Hope Downs Feasibility Study PeriodHope Downs Feasibility Study PeriodIn 1998, the Hancock Group and the Iscor Group began a bankable feasibility study of the potential development of the Hope 1 iron ore depositHope Downs Management Services (HDMS) was formed to manage the bankable feasibility study (BFS)The original Project concept was to:• Produce 15 Mt/a of discrete Marra Mamba lump and fines from Hope
1, and• Deliver the ore “on ship” using shared rail and port infrastructure
In late 2000, the Project concept was revised to:• Produce 25 Mt/a of discrete Marra Mamba lump and fines from Hope
1, and• Deliver the ore “on ship” using independent rail and port
infrastructureThe FS technical report was completed in July 2002
Hancock Prospecting Pty Ltd
Geological ProgramGeological Program
100,000 metres drilling during pre-feasibility
32,000 metres drilled in feasibility study
13 exploration shafts sunk (1000 m)
Representative samples - 1997 and 1999
Revised Resource model - September 1999
Hancock Prospecting Pty Ltd
Geology Geology Most iron ore deposits of economic value in the Pilbara were derived by enrichment of either the Brockman Iron Formation or the Marra Mamba Iron FormationIron ore from the Marra Mamba Iron Formation will be mined at Hope 1 Hope 1 is made up of 2 orebodies• Hope North• Hope South
Figure 3.5 Diagrammatic cross section of Hope 1
WittenoomDolomite
Marra Mamba
Iron Formation ore
ore
detritusdetritus
HopeSouth
HopeNorth
E
W
Hancock Prospecting Pty Ltd
Geology Geology At Hope 1, the mineralised zone contains three ore-types:
Figure 3.9 Schematic diagram showing the locationof different ore-types at Hope 1
Hydrated ore-type
2. Hydrated ore-type, <10%, generally LGDetrital ore-type
3. Detrital ore-type, <10%, generally LG
1. Bedded ore-types, ~80%, mainly HG
Bedded ore-types
• Main minerals are goethite and hematite• Ore-type characteristics are the same at Hope
North and Hope South
Hancock Prospecting Pty Ltd
GeologyGeology
Initially, most of Hope 1 had been drilled on a 200 m × 50 m gridInfill drilling (on a 100 m × 50 m grid) was carried out during the BFS to:• Confirm the structural
interpretation• Confirm the accuracy of
drilling data• Increase confidence in the
Mineral ResourceDrilling summary (total)• 1552 holes• 134 172 m (16% diamond
drilling) Drill rigs operating at Hope 1
Hancock Prospecting Pty Ltd
GeologyGeologyMineral Resource estimate - Hope 1
Derived from geological cross sections based on drillingConsistent with the Australian Code for Reporting Mineral Resources and Ore Reserves (Mineral Resource tonnage estimate is inclusive of Ore Reserve tonnage estimate)Cut-off grade = 58%Fe ; Average in-situ density = 2.8 t/m³
61.8
3.0
1.6
0.06
% dry basis
Fe
SiO2
Al2O3
P
0.1
6.7
Mn
LOI
Mineral Resource490 Mt, in situ#
Measured; 195 Mt
Indicated; 270 Mt
Inferred; 25 Mt
# dry, to the nearest 5 Mt
Increasing level ofgeological knowledge
and confidence
Hancock Prospecting Pty Ltd
Sample evaluationSample evaluation
Bulk sampling (drum sample) programs:• A decline (mainly hydrated ore-type)• 12 winzes (vertical shafts), maximum
depth 81 m• 8 winzes in Hope North• 4 winzes in Hope South
Winze and decline locations at Hope 1
6000 N
10000 N
12000 E
Hope NorthHope North
Hope SouthHope South
∀1
2
3 456
78
9
10
11
12
Decline
6000 N
10000 N
12000 E
Hope NorthHope North
Hope SouthHope South
∀1
2
3 456
78
9
10
11
12
Decline
12
3 456
78
9
10
11
12
Decline
• A bulk marketing sample was prepared from winze material in 1999
– Represented the first ~110 Mt of ore to be mined– Lump ore was conditioned
• Material recovered from the winzes was also used for evaluation of ore processing characteristics
Hancock Prospecting Pty Ltd
MiningMiningOre Reserve estimate - Hope 1
Derived from the Mineral Resource estimate (Measured and Indicated categories only)Consistent with the Australian Code for Reporting Mineral Resources and Ore Reserves (Ore Reserve tonnage estimate is within the Mineral Resource tonnage estimate)Tonnage and grade estimates include dilution (<5%)
Apply mining recovery factors, schedules & blending ratios
Apply mining recovery factors, schedules & blending ratios
Ore Reserve400 Mt, saleable#
Proved; 175 Mt
Probable; 225 Mt
61.6
3.09
1.59
6.7
% dry basis
Fe
SiO2
Al2O3
LOI
Mineral Resource490 Mt, in situ#
Measured; 195 Mt
Indicated; 270 Mt
Inferred; 25 Mt
# dry, to the nearest 5 Mt
Hancock Prospecting Pty Ltd
MiningMining
Conventional open pit mining operation• Horizontal 10 m benches
6000 N
10000 N
12000 E
SouthCentral
SouthEast
NorthEast1
NorthFlatTop
NorthWest
Hope NorthHope North
Hope SouthHope South
∀SouthWest
NorthEast2
∀ Hope 1
Mt Whaleback
Marandoo
∀ Hope 1
Mt Whaleback
Marandoo
6000 N
10000 N
12000 E
SouthCentral
SouthEast
NorthEast1
NorthFlatTop
NorthWest
Hope NorthHope North
Hope SouthHope South
∀SouthWest
NorthEast2
∀ Hope 1
Mt Whaleback
Marandoo
∀ Hope 1
Mt Whaleback
Marandoo
Definition of pit areas for mine planning
Mine planning – pit design and operations• Hope North is:
– divided into 4 pits for scheduling– ~6000 m long and 500 m wide
• Hope South is:– divided into 3 pits for scheduling– ~5000 m long and up to 750 m wide
Hancock Prospecting Pty Ltd
MiningMiningMine operations – equipment
Equipment selections were made to:• Ensure the required mining
selectivity• Take advantage of the latest
developments in mining technology
• Standardise the mining fleet
Mining operations – quality control concept• Target product quality will be achieved by:
– Grade control drilling– Maintaining adequate drilled and broken stocks– Mining from pits with complementary blending
grades– Using run of mine stockpiles (before primary crusher)
Table 5-11 Major mining fleet at 25 Mt/a productionEquipment Proposed size Number
Blast hole drills 251 mm diameter 4
Hydraulic excavators 30 m³ bucket 2
Front End Loaders 16 m³ bucket 2
Haul trucks 231 t 18
Komatsu 830E haul truck
Hancock Prospecting Pty Ltd
PlantPlantFlowsheet and facilities
Plant design by Fluor DanielFinal design production rate = 25 Mt/a (dry)Two stage crushing and screening plant to produce separate lump (-31.5+6.3 mm) and fines (-6.3 mm) products at Hope 1Construction will proceed in 2 phases:
Phase 1: initial design production rate of 15 Mt/aPhase 2: additional production capacity of 10 Mt/a
25 Mt/aPhase 2; +10 Mt/a
overlandconveyor
HopeSouth
Schematic outline of ore processing plant
∀
Phase 1; +15 Mt/a
lump
productscreeningmodules
fines
scalpingmodules
secondarycrushingmodules
primarycrushingmodule
HopeNorth
Hancock Prospecting Pty Ltd
PlantPlantMine stockyard
The mine stockyard will be located inside the rail loopStockyard capacity will be 600 000 t (live)Each live stockpile has sufficient ore to fill 2 trains, each of 224 ore cars
Train loading and infrastructureTrain loading
• Proposed system used successfully at other Pilbara operations
• Designed to load 224 ore cars with up to 125 t per ore car in a total time of 3 hours
Infrastructure• Stand-alone services• Appropriate to a fly-in / fly out
operationOreprocessing
plant
Trainloadout
Rail loop
∀Schematic outline of mine stockpiles and train loadout
Overland conveyor(from Hope South)
Hancock Prospecting Pty Ltd
Feasibility Study Results Feasibility Study Results –– Mining and Ore ProcessingMining and Ore Processing
Mineral Resources . . . . 490 Mt at 61.8%FeOre Reserves . . . . . . . . 400 Mt at 61.6%FeWaste : Ore ratio . . . . . 1.4 : 1.0Mining method . . . . . . . Open-cut; drill, blast, load &
haulProduction ramp-up . . 5 Mt/a steps to 25 Mt/a by Year 5Ore processing plant . . Dry, 2 stage crushing and
screeningProducts . . . . . . . . . . . .47% lump, 53% fines at mineApprovals . . . . . . . . . . .Secured
Hancock Prospecting Pty Ltd
Product quality projectionsProduct quality projections
Projections of physical properties have been made based on:
• Results from testworkcarried out on the composite lump and fines prepared during the BFS
• Simulation of the mine to port handling and transportation process
Table 9-5 Projected physical properties (at port) Test Typical value
Bulk density (uncom pacted, dry)
Lump, kg/m³ 1850
Fines, kg/m³ 2050
Tumble Strength ISO 3271
Tumble Index; TI, %+6.3 mm 86
Abrasion Index; AI, %-0.5 mm 8
Decrepitation ISO 8371
Decrepitation Index; DI, % -6.3 mm 5
Reduction Disintegration ISO 4696-1
LTB, % +6.3 mm 60
LTB, % -3.15 mm 22
Reducibility ISO 4695
(dR/dt)40, % /min 1.24
65% reduction time, min 50
Hancock Prospecting Pty Ltd
Iron Making Slag Rate Index comparisonIron Making Slag Rate Index comparison
The slag rate index of Hope 1 lump is:* ~5% lower than Brockman lump
The slag rate index of Hope 1 fines is: * ~15% lower than Hamersley and Yandi fines* ~25% lower than Mt Newman fines * ~55% lower than Mesa J fines
Hancock Prospecting Pty Ltd
Infrastructure Infrastructure -- RailRail
New heavy-haul railway from Hope 1 to Port HedlandDesigned as an independent operationTotal length ~370 km3 passing sidings required for a capacity of 25 Mt/aHope 1 •
km0 100
N
BHP Yandi
Mt Whaleback Jimblebar
PortHedland
Hancock Prospecting Pty Ltd
RailwayRailway
Schematic long section of proposed railway
0
200
400
600
800
0 40 80 120 160 200 240 280 320 360
Distance, km
Hei
gh
t, m
RL
ChichesterRange
HancockRange
PortHedland Hope 1
Passingsiding 1
Passingsiding 2
Passingsiding 3
0
200
400
600
800
0 40 80 120 160 200 240 280 320 360
Distance, km
Hei
gh
t, m
RL
ChichesterRange
HancockRange
PortHedland Hope 1
Passingsiding 1
Passingsiding 2
Passingsiding 3
Hancock Prospecting Pty Ltd
PortPort
Hope 1 ore exports through Port Hedland New ore handling & ship loading facilities designedHDMS has lease options over land on the western side of Port Hedland harbour and a new berth site at Harriet Point
Aerial view of Port Hedland harbour, looking E
N S
W
E Nelson Point berths (BHPBIO)
Finucane Island berth (BHPBIO)
Harriet Point
Hancock Prospecting Pty Ltd
PortPortThe port materials handling system will be developed in 2 stages:
• Stage 1: initial capacity = 15 Mt/a• Stage 2: to increase capacity to 25
Mt/aThe system will comprise:
• Train unloading facilities (twin cell dumper)
• An in-loading circuit• ore stacking (capacity = 10 000
t/h)• stockpiling (capacity = 4.1 Mt at
Stage 2)• An out-loading circuit
• ore reclaiming (capacity = 10 000 t/h)
• lump rescreening (up to 9 screens at Stage 2)
• A fines-return circuit and bulking in circuit
• Product sampling facilities Schematic outline of port materials handling system
Stage 1; +15 Mt/a
Stage 2; +10 Mt/a
Car dumper
Total; 25 Mt/a
Lump rescreening plant
Feasibility Study Feasibility Study -- ConsultantsConsultants
Geological Modeling - SnowdensHydro-geology - AquaterraMine Design & Scheduling - SnowdensProcess Plant - Fluor DanielRail - HGM/ Fluor DanielMaterials Handling - Fluor DanielMarine - HGMEnvironmental - Biota
Iron Ore Market Outlook Iron Ore Market Outlook -- DemandDemand
Further consolidation amongst steel makersChina to rely more on imported iron oreConsumers focusing on consistent, high quality, raw materials
Iron ore imports by China(historic and forecast)
~155 Mt
020406080
100120140160180
1985 1990 1995 2000 2005 2010 2015
Year
Mt
Hancock Prospecting Pty Ltd
Iron Ore Market Outlook Iron Ore Market Outlook -- SupplySupply
Consolidation of iron ore supply; completed?Continued growth in seaborne iron ore tradeHigh quality lump ore supplies are limited
Seaborne iron ore trade
0
100
200
300
400
500
600
1985 1990 1995 2000 2005 2010
Year
Mt
Hancock Prospecting Pty Ltd
Iron Ore Market Outlook Iron Ore Market Outlook –– Hope DownsHope Downs
Strong formal support for the Project from ChinaHDMS is working to secure formal support from other markets
Proposed sales - by market
China50%
Japan25%
Other Asia10%
Europe15%
Hancock Prospecting Pty Ltd
Financing OptionsFinancing OptionsKumba Resources Ltd• Public listing on JSE (October 2001)
Equity Investor/sConventional Project Finance• Strong market support• Sound engineering design• Competent managers
Mining ContractorInfrastructure Outsourcing• Infrastructure Funds• Rail & Port investors
Hancock Prospecting Pty Ltd
Hancock Prospecting Pty Ltd
Ownership Structure: Joint Venture stageOwnership Structure: Joint Venture stage
HancockHancock KumbaKumba
Hope DownsHope DownsJoint VentureJoint Venture
EquityEquityInvestorsInvestors
Project Development ScheduleProject Development Schedule
Feasibility Report completed . . . . . . February 2002
Letters of Intent/sales contracts . . . . 4th Quarter 2002
Government approvals . . . . . . . . . December 2003
Construction commences . . . . . . . . January 2004
Shipments to customers commence . . 2nd Quarter 2006
Hancock Prospecting Pty Ltd
Why Not? Why Not? -- That WhyThat Why
Hancock Prospecting Pty Ltd
WA IRON ORE PRODUCTION AND DESTINATION - 2001
Mine Domestic Japan China Korea Taiwan Europe Other Total
HI operations - 19.0 12.6 10.3 4.4 4.0 0.6 50.9Channar - - 9.7 - - - - 9.7Newman 3.2 11.2 7.7 3.1 2.7 2.5 - 30.4Goldsworthy 2.5 3.5 0.8 - 0.5 - - 7.3BHP Yandi 1.5 14.6 3.0 8.1 2.0 1.6 - 30.8Robe River 0.4 17.2 1.0 1.4 - 7.9 0.4 28.3Koolyanbobbing 0.1 - 3.2 - - - - 3.3Cockatoo Island - - 1.2 - - - - 1.2
Total bydestination
7.7 65.5 39.2 22.9 9.6 16.0 1.0 162.0
Why Not? Why Not? -- That WhyThat Why
Hancock Prospecting Pty Ltd
COMMITTED OR POSSIBLE NEW IRON ORE PROJECTS IN WESTERN AUSTRALIA
Mine Expected Production Destination Expected Start-up
West Angelas 20Mt/a East Asia July 2002Mining Area C 15Mt/a Korea 2003Eastern & Western Rangesand Paraburdoo
20Mt/a China 2004
Hope Downs 25Mt/a East Asia 2006Portman Expansion An extra 5Mt/a China 2006BHP Billiton’s Yandi An extra 5Mt/a short term East Asia 2003Nammuldi/Silvergrass An extra 3Mt/a short term East Asia 2007Mount Gibson 1.5Mt/a East Asia 2003Yandicoogina expansion An extra 3Mt/a East Asia 2007
TOTAL 97.5Mt/a
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