Fe Limited (ASX:FEL) has taken another key step towards first production from the JWD Iron Ore Project in Western Australia by executing a haulage contract with David Campbell Transport Pty Ltd.
The experienced road train haulage contractor will act as lead haulage contractor for the project.
Campbell Transport will provide haulage of a minimum of 1,200 tonnes per day, which comprises around 60% of the intended initial JWD volumes.
The haulage contractor will also provide road train loading services to the other haulage contractors performing the remainder of the haulage.
Mining operations progress
This key contract comes as mining operations progress in line with the plan while commissioning is underway for the crush and screen plant.
FEL executive chairman Tony Sage said: “We are pleased to have secured the services of Campbell Transport as our lead haulage partner for JWD.
“Road trains in short supply”
“It has been well documented that road trains are in short supply at present so to secure the services of an experienced contractor in this market speaks volumes for the FEL team and the potential of the JWD Project,” he said.
Campbell Transport has been established for more than 20 years with a long history of bulk commodity haulage with a focus on iron ore.
Floating price element
Under the terms of the contract, the haulage rate is fixed for the first six months and then reverts to a floating rate (above a floor rate) that is based on FEL’s realised iron ore price.
This provides upside to the contractor in times of elevated pricing such as at present and provides protection for FEL by reducing haulage costs if iron ore prices decline in the future.
“Will drive alignment”
Sage said: “The contract pricing methodology will drive alignment between the parties and assist FEL to reduce the cost of its largest cost item in the event iron ore prices decline in the future.”
Fe Limited continues to make strong progress with other aspects of bringing JWD to production.
Crushing plant
The crush and screen plant has mobilised to site and assembly is complete.
Commissioning is underway, with first production of saleable product expected to be on the product pad over the course of this week.
Crushing plant commissioning at JWD.
Load and haul of ore
Mining operations are fully established with the load and haul of ore and waste progressing in accordance with the mine plan.
ROM ore stocks are available for commissioning and first production from the crush and screen plant.
Sage concluded: “Port and offtake remain the key items for us to complete, these are well advanced and we expect to update shareholders shortly.”