Highlights

1.      Safety performance continued to improve, with a 12-month rolling Lost Time Injury Frequency Rate (LTIFR) of zero and a Total Reportable Injury Frequency Rate (TRIFR) of 3.19 at September 2020, an improvement of 3% over the quarter.

2.      COVID-19 Polymerase Chain Reaction (PCR) screening testing continued with 42,055 tests completed during the quarter and more than 75,000 completed this year through MRL’s 10 screening facilities in metropolitan Perth and regional areas across Western Australia (WA).

3.      Mining Services volumes increased 24% versus Q120 and 7% versus Q420, in line with expectations. Guidance remains for FY21 volumes to increase 20 to 25%.

4.      Total iron ore production remained steady at 4.2 million (m) wet metric tonnes (wmt) for the quarter.

5.      Koolyanobbing operations shipped 2.2m wmt iron ore for the quarter with production expected to ramp up to meet full year guidance.

6.      Iron Valley shipped 1.3m wmt iron ore for the quarter, in line with the mine plan and guidance.

7.      Average iron ore revenue received of US$97 per dry metric tonne (dmt) during the quarter, 15% higher than the previous quarter.

8.      During the quarter, MRL agreed to purchase the Wonmunna Iron Ore Project (Wonmunna) from Australian Aboriginal Mining Corporation Limited (AAMC). The purchase was for an immaterial cash consideration and a royalty which MRL will pay AAMC in respect of the first 40m dmt extracted and removed from the area. Wonmunna has a forecast capital cost of approximately $126m (including the acquisition cost) with an initial design of 5.0m wmt per annum production. Exports of 1.0m to 2.0m wmt are expected in H2 FY21. Operating costs are expected to be similar to MRL’s nearby Iron Valley operation.

Table: Production and Sales Summary

Koolyanobbing

Ore delivery and hydrogeology issues in the Deception pit caused material handling issues in the supply chain, which hampered production for the quarter. This required changes to blending to allow efficient crushing and railing activities while still maintaining quality.

Mining operational procedures were amended to compensate for the hydrogeology issues by substituting low strip ratio material movement in W7. Work in the F1 pit commenced in earnest during the quarter, with access established in July. Windarling and Jackson pits remained in steady state with some delays experienced in August across all pits due to weather impacts.

Crushing operations, hampered in part by the impacts of Deception material, prompted MRL to introduce a new Mobile Crushing Plant to supplement the primary Koolyanobbing crusher in order to meet the required run rate. The new plant was successfully commissioned in early August.

Shipped tonnes of 2.2Mt in the quarter were down due to the material handling issues. Production and shipping are being ramped up in Q2 to Q4 as planned. FY21 guidance remains unchanged at 12 to 12.7mt with a year-end run rate of 13mtpa.

Iron Valley

At Iron Valley, a successful dewatering campaign and robust risk management of ground conditions facilitated the completion of the C8 pit. Focussed effort on waste movement in Stage 1 and 2 in C10 has exposed the ore body to meet the shipping schedule in Q2.

Mining and crushing were supplemented by the recommenced Phils Creek pit, which will provide lower phosphorus blending options. Shipped tonnes of 1.3Mt in the quarter were down on Q4 FY20 because of the timing of the final shipment, which fell into Q2. FY21 Guidance remains unchanged at 7.5 to 8.5mt with a year-end run rate of 9mtpa.