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Moonshine magnetite fines. Source: Macarthur Minerals
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  • With the iron ore market on tenterhooks over future pricing and margins, high-grade and eco-friendly iron ore projects are looming as an area of investor focus
  • For iron ore miners, it’s no longer about how much iron ore they can produce, but the quality of the material they’re pulling from the ground
  • Perth-based Macarthur Minerals is one of the players poised to capitalise on the focus on quality green steel with its Lake Giles magnetite project in the Yilgarn region of WA
  • The wider Lake Giles project mineral resources include the Ularring hematite project and the Moonshine magnetite project
  • Macarthur Chief Executive Officer Andrew Bruton says the company is well advanced with its magnetite project and well placed to process material that export markets will demand

With the iron ore market on tenterhooks over future pricing and margins, high-grade and eco-friendly iron ore projects are looming as an area of investor focus.

The recent spot price of iron ore has dipped significantly, with the fall driven by China’s decision to use only high-quality products and shut some of its steel mills in its approach to net-zero emissions and clearer skies for the Winter Olympics.

For iron ore miners, it’s no longer about how much iron ore they can produce, but the quality of the material they’re pulling from the ground. It’s finding the balance between easy-to-ship hematite and the purer end-product produced from magnetite.

Already, the companies run by iron ore heavyweights Andrew Forrest and Gina Rinehart have invested in magnetite projects. And recently, Mineral Resources slashed the company’s iron ore guidance amid higher costs and the need for higher grades.

Australia’s export markets will be looking for high-quality products with a low-carbon output, meaning projects with strong fundamentals, a high average grade of ore, and environmentally conscious refining methods are primed for growth.

Perth-based Macarthur Minerals is one of the players poised to capitalise on the focus on quality green steel with its Lake Giles magnetite project in the Yilgarn region of Western Australia.

The wider Lake Giles project mineral resources include the Ularring hematite project and the Moonshine magnetite project.

Hematite ore has a higher percentage of iron at 58-64% of Fe by molecular weight, while magnetite has a lower 34-36% of Fe by the same measure. Magnetite ore typically requires more processing than hematite, but because it is magnetically susceptible, impurities can be liberated more effectively through processing, which means that end products made from magnetite ore are typically of a much higher quality than those made from hematite. Processed magnetite ore has fewer impurities than hematite ore; and in this way, the elevated cost of processing magnetite ore can be balanced out with the premium pricing that it attracts.

Macarthur Chief Executive Officer Andrew Bruton says the company is well advanced with its magnetite project and well placed to process material that export markets will demand.

“Given the imminent delivery of our definitive feasibility study, which will show the project economics, I’m confident we are considerably further advanced than other projects in the region,” said Mr Bruton.

“The encouraging thing for me, when I look at Macarthur is that our magnetite project fundamentals in particular will be proven to remain very sound because we have a high-grade product that fits with the coming green steel revolution,” said Mr Bruton.

“Green steel is the production of steel with net-zero emissions. That’s only possible when you use a combination of high-grade magnetite pellets and scrap steel in electric arc burners.”

The Macarthur CEO says it’s important that investors understand that not all iron ore stocks are the same.

“When people see the iron ore price they generally see the 62% grade spot price movements, but there’s also a 65% benchmark and over the last few years there’s been a consistent premium on the higher grade, and that’s exactly where we’re focused.”

Recent announcements by majors like Hancock and MRL to pivot to magnetite production means that the shift is on, and with changes to global regulations on emissions and the world now targeting net-zero by 2050, it’s likely that investors who spot early opportunities in advanced high-grade projects like Macarthur’s, will have the most to gain at this point in the iron ore cycle.

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