Magnetite Mines Limited (ASX:MGT) has announced a significant step forward in the development of its Razorback Iron Ore Project, signing a non-binding Heads of Agreement with JFE Shoji Australia Pty. Ltd. (JFE), an Australian subsidiary of JFE Shoji Corporation.
The agreement outlines terms for negotiating a binding transaction that could see JFE provide funding for the completion of the Razorback Iron Ore Project’s Definitive Feasibility Study (DFS).
In exchange, JFE would receive offtake rights for up to 10 per cent of the planned Stage 1 production of “DR-grade” magnetite concentrate over a 15-year term.
Tim Dobson, CEO of Magnetite Mines, expressed enthusiasm about the partnership, stating: “We are delighted to formalise our collaborative efforts today, the culmination of a comprehensive due diligence effort and the first stage of what we envisage will be a long and prosperous relationship for both parties.”
Koichi Sawada, Managing Director of JFE Shoji Australia, highlighted the strategic importance of the project, stating: “We see tremendous opportunity in this project that is highly aligned with our strategic priorities, including supporting global efforts to decarbonise steelmaking.”
The agreement aligns with South Australia’s recently released Green Iron and Steel Strategy.
Tom Koutsantonis, South Australian Minister for Energy and Mining, commented on the alignment, stating: “South Australia has a key advantage with abundant magnetite resources, which presents the opportunity for the state to be at the vanguard of efforts to meet the world’s increasing demand for green iron.”
The partnership between Magnetite Mines and JFE Shoji Australia represents a significant step towards the development of the Razorback Iron Ore Project, which is positioned as one of only a few projects globally capable of producing premium-grade magnetite concentrate at scale.
Both parties aim to execute a Definitive Agreement by January 31, 2025.
This collaboration could potentially lead to JFE’s participation in a joint venture or other investment vehicle to realise the development of the Razorback Project, subject to the findings of the DFS.
This agreement marks an important milestone in Australia-Japan trade relations, particularly in the context of global efforts towards decarbonisation in the steel industry.
