Hawsons Iron considering multi-staged operation

Hawsons Iron Ltd (Hawsons) is considering a multi-staged mining operation at the planned magnetite mine project 60km southwest of Broken Hill.

When Hawsons realised the inflationary impact of the global economic climate, the company moved into problem-solving mode.

Hawsons’ Managing Director, Bryan Granzien, said the company decided to immediately review its operations when the updated capital cost estimates included ‘implausible contingencies’ up to 50%  and, in some components of the project, an escalation of as much as a 300%-plus within a year.

“These numbers could not be ignored and it is expected many other companies around the world will be facing similar challenges,” he said.

“The Board’s decision to slow activity on the 20 Mtpa Bankable Feasibility Study (BFS) was rightly taken to prudently preserve the Company’s cash resources while we take stock, move into problem-solving mode and formulate the optimal path forward, which will be impacted by the changing world conditions,” he said.


A mining company undertakes a bankable feasibility study (BFS) to provide a forward analysis of the project costs, contingencies and risks from pit-to-port, which focus on all aspects of the project, from mine plan to geological studies, sampling and drilling, processing, resource calculations and logistics.

Hawsons’ review will examine less expensive pathways to meet the strong demand for high-grade magnetite concentrate, often known as green steel, at its mine.

One of the pathways Hawsons is considering is a multi-staged mining operation with an initial lower-base production rate to “right-size” the project until improved market conditions allow for the development of their preferred 20 million tonnes per annum (Mtpa) operation.

The 20 Mtpa BFS focussed on constructing a 390km underground slurry pipeline from the mine to a new deep-water port at Myponie Point on South Australia’s eastern Spencer Gulf.

The review will examine the potential of scaling up production in stages using existing transport infrastructure instead of the pipeline to reduce capital outlay in the initial stages of production.

Mr Granzien said to evaluate and determine the optimal pathway forward, the company would still need to raise additional working capital, which will be discussed at the upcoming Annual General Meeting on November 15.

“We were preparing to raise additional capital earlier in the year, but a rapidly rising aversion to risk within equity markets abruptly curtailed our plans in the face of mounting global economic uncertainty,” Mr Granzien said.

The inflationary impact of the pandemic on the global economy and supply chains, combined with the interest rate policy responses of central banks around the world and the Russian invasion of Ukraine, have impacted cost estimates. Mr Granzien said these could continue to generate strong market headwinds for some time.

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