Australian mining company, Amex resources, has been granted a mining lease to extract iron sands from 120 square kilometres of tidal estuary and shallow water in and around the Ba River delta.
The 21-year lease allows the extraction of 220 million tonnes of sand, with first shipments scheduled for the end of next year.
Amex Managing Director, Matthew Collard, told Jemima Garrett work extracting the iron sand is a very simple operation.
Presenter: Jemima Garrett
Speaker:Matthew Collard, Managing director, Amex Resources
COLLARD: We are a dredging operation, so very similar to previous exercises around Fiji when they have used it for flood mitigation in the river systems. We'll be dredging up the sand and the only difference is that we will have a floating concentrator behind our dredge. That dredge will be extracting the iron minerals and once we've extracted the iron minerals we'll be depositing the remaining sand back into the sea floor and then transporting the iron in a transport barge 30 kilometres to the Lautoka Port, where it will be stockpiled and loaded onto a handimax vessel, more likely to be destined for China.
GARRETT: And the actual processing, what does that involve exactly?
COLLARD: It is a screen and magnetic separation. So there is no chemicals, no crushing or grinding. It really is soaking up the sand and putting it across screens that then go across rougher and cleaner magnetic drum separators that allow you to extract the iron minerals, and the remaining sand, which is approximately 93% of what you are dredging, will go back onto the seafloor.
GARRETT: What will the project mean in terms of jobs and income for Fiji?
COLLARD: In regards to jobs, we are looking to employ approximately 300 people whilst we are in production. The number for construction is slightly higher. We are looking to employ 350 through the engagement of local contractors and our own direct employment. And the jobs will basically be sourced using local resources and will range from dredge operators through to security officers but we are looking to train up on-site a lot of positions.
GARRETT: What sort of tax concessions were you able to negotiate for the project and how long will they last?
COLLARD: There has been no tax concession negotiated with the government to date. There is a 3% export royalty that the company must pay once we are exporting the product and then, at this moment in time, we are obligated to the 20% corporate tax, as every other entity. We haven't proceeded into any incentives, or tax incentives at this stage. We've just been focussed on getting all our approvals through so that we can get into the construction phase.
GARRETT: Two hundred and twenty million tonnes of sand is a lot of sand. How does this resource in the Ba delta compare with other resources around the world?
COLLARD: I think the benchmark for iron sands production is definitely New Zealand. They have been doing it for many decades now and have set the standard. They are a high quality iron sands producer. Ba delta, once we have the project up and running, the scheduled production rates are not too dissimilar to New Zealand's operation at the moment so it will place the Fijian operation up there as one of the larger iron sands producers.
GARRETT: Environmental permitting is complete. What are the main risks identified in your environmental impact statement?
COLLARD: As you said, we have obtained our approvals. The environmental management plan will obviously monitor the production and activities, obviously, plume control. Basically being a marine- based environment, making sure there is no contamination at any stage through the process, is important. There is the advantage there, as we said earlier, that there is no chemicals, there is no crushing and grinding so effectively, it is a very simplistic mining operation. And it will involve constant monitoring as it has to get the approvals in place, to date.
GARRETT: Your dredging is in shallow water close to reef systems in Bligh Water. In Australia, we have just seen no less a body than UNESCO warn that dredging and Port development in Gladstone is threatening the world heritage values of the Great Barrier Reef. How will you prevent damage to fish stocks and marine resources?
COLLARD: I guess, the Ba delta ..and part of our scooping studies were to assess the current environment and that is obviously, very important for the company. The inner reef system sits approximately 3 kilometres away from the delta and in October 2009 samples were taken. And we do have base studies that are our benchmark and our gauge. Obviously, the river system and managing it, and making sure we do not cause any further damage to the reef is important to us. We have engaged a local environmental consultant who is highly regarded in Fiji and he will be responsible for the continued monitoring of the mining operation.
GARRETT: You are about to release your bankable feasibility study for the project. How significant is that?
COLLARD: Obviously, very significant. It has obviously progressed from the pre-feasibility and on the back of that we'll allow for the access funding. we are anticipating that will be released to the market next week and that should be able to confirm the capital costs of the operation and the viability, economic viability of the project.