OneSteel's Value Chain

Project Magnet
Project Magnet, the commercialisation of OneSteel’s magnetite ore reserves for producing steel and the maximisation of the sale of hematite ore to global markets, has been a five–year project for the company. Project Magnet is one of the biggest developments in OneSteel’s history and has delivered a number of successes.

Ultimately, Project Magnet has extended the life of the Whyalla Steelworks until 2027 and enabled OneSteel to increase hematite iron ore exports to more than 4 million tonnes per annum.

During the 2008 financial year, OneSteel delivered a number of achievements on Project Magnet including the transition of the pellet plant and blast furnace to magnetite–based feed. This extends the life of the steelworks and enables OneSteel’s hematite ore to be available for sale. At the Whyalla Steelworks, OneSteel began exports to four long–term iron ore customers in China. Total hematite iron ore exports reached 4.4 million tonnes, well ahead of the company’s 4 million tonnes target.

In February 2008, OneSteel announced that work was underway to further increase iron ore sales above 4 million tonnes per annum and to identify and prove up increased iron ore reserves. We call this additional work, Project Magnet Phase 2.

Project Magnet Phase 2
The first stream of Project Magnet Phase 2 is aimed at increasing sales of iron ore through improvements to OneSteel’s operational and supply chain capability including a review of all mining, handling, crushing and screening, rail, warehousing and barging operations. We have also incorporated additional plant and equipment including rolling stock and crushing and mining equipment. We expect the outcome of this first stream of work to result in an increase in OneSteel’s iron ore sales to 6 million tonnes per annum from the start of the 2010 financial year.

The second stream of Project Magnet Phase 2 is a two–year program that includes three steps. The first involves updating mine plans. Significant progress has been made on this front, resulting in a further 13 million tonnes of hematite being added to OneSteel’s reserves.

The second and third steps include actively pursuing mine extension and exploration work. The mine extension and exploration work has commenced and will continue to ramp up during the year with initial focus being on extension drilling work.

Future benefits
Project Magnet has extended the life of OneSteel’s Whyalla Steelworks to 2027. Project Magnet is expected to enable further increases in iron ore exports from 4 million tonnes per annum to 5 million tonnes for the 2009 financial year. Initial progress with Project Magnet Phase 2 supports a further extension of iron ore exports to a rate of 6 million tonnes per annum by the start of the 2010 financial year.

Project Magnet is ultimately expected to enable OneSteel to increase steel production to approximately 1.3 million tonnes a year and to also facilitate pellet exports of up to approximately 200,000 tonnes per annum.

Project Magnet continues to create employment opportunities through ongoing efforts to increase the skills of existing employees and also introduce cadetships and a graduate program over the next five years.

Environmental benefits
The transition of the Whyalla Steelworks under Project Magnet to magnetite feed, has changed the iron ore pellet process from a dry to a wet process. Magnetite ore is pumped via a slurry pipeline from the mine to the steelworks and results in benefits to the Whyalla community by reducing the level of fugitive dust emissions.

Project Magnet has also fostered the use of covered facilities for loading iron ore and the relocation of the crushing and screening area to the mine site, which has resulted in further improvements in environmental conditions for Whyalla.

Under Project Magnet, a transshipping service has been introduced to avoid major dredging of the Whyalla Port and a new fleet of high–sided wagons has been put into service.

The benefits from Project Magnet play an important part in enhancing the sustainable competitiveness of both the Whyalla Steelworks and OneSteel as a whole.