Mining Area C "MAC"

Large scale and low cost iron ore mining operation

Cornerstone asset, located in the Pilbara region of Western Australia

One of the largest global iron ore operations

Ongoing revenue based royalty and production capacity payments

Counterparty

BHP, Itochu, Mitsui

Commodity

Iron Ore

Location

Pilbara, WA

Status

Producing

Iron Ore – MAC Royalty’s cornerstone asset

Mining Area C is located approximately 90km north west of Newman Township in the Pilbara region of Western Australia, one of the premier iron ore provinces in the world.

Operated by BHP, Mining Area C will form the largest operating iron ore hub in the world, producing 145 million tonnes of iron ore each year when the recently completed South Flank expansion reaches full production.

Royalty Agreement

Deterra’s royalty agreement with BHP and its partners Itochu and Mitsui (the “MAC”) provides for a revenue-based royalty and production capacity payments consisting of:

  • ongoing quarterly royalty payments of 1.232 per cent of Australian denominated revenue from the MAC Royalty Area; and
  • a series of one-off payments of AUD$1 million per million dry tonne increase in the annual production level from the MAC Royalty Area during any 12 month period ending 30 June above the previous highest annual production level.

 

The demonstrated annual capacity level as at 30 June 2021 is 59mdmt.

Production for FY21

Mining Area C production for the financial year was 61.6 million wet metric tonnes (100 per cent basis). Despite production during the year being impacted by Mining Area C and South Flank tie-in activity, the operation achieved record production in the June 2021 quarter to deliver the strong operational result.

North and South Flanks

Mining Area C has two major operations:

  1. The North Flank, which has been operational since 2003 with a history of consistent and growing iron ore production and current capacity of 65 million wet tonnes per year (mwtpa); and
  2. The South Flank, Australia’s largest new iron ore mine in over 50 years, which achieved first production in May 2021 folllowing a USD3.6 billion development project. South Flank is a sustaining mine which will replace declining production from mines outside the MAC Royalty Area and has an announced capacity of 80 million mwtpa.

 

Current MAC operations are expected to continue until ~2050, with the potential for further extension.

Other Royalty Assets

Yoongarillup Mineral Sands Mine

Wonnerup North Project

Eneabba Project

St Ives Gold Project

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