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Proactive Investors: Magnetite Mines in exclusive talks with SA Government for Razorback water supply

28 September 2023


Magnetite Mines in exclusive talks with SA Government for Razorback water supply | ASX:MGT (

Cabinet approval has been granted for Magnetite Mines Ltd (ASX:MGT) to begin exclusive negotiations for its proposal to access a previously discarded wastewater source from the Murray Basin for magnetite processing, marking a substantial show of support from the South Australian Government for the company’s Razorback Iron Ore Project.

A proposal to access wastewater from the Stockyard Plains Salinity Management Basin (SPSMB) is one of two preferred water supply options to sustain Razorback’s planned 5 million tonnes per annum operations.

The decision to grant the six-month exclusive negotiations aligns with the state’s emerging green steel strategy, which prioritises sustainable and environmentally friendly practices within the steel industry.

Additionally, the proposal embraces the unique and beneficial environmental, social and governance (ESG) aspects that are aligned with the company’s ‘foresight’ sustainability platform.

“Extremely encouraging” development

“For over 30 years, salinity levels in the Murray River have been government-managed by extracting salty groundwater using an array of bore pumps alongside the river and discarding it to evaporation ponds with no beneficial use,” MGT chief executive officer Tim Dobson said.

“Using this wastewater for value-adding to South Australia’s mineral resources makes logical sense and has potentially profound environmental benefits.

“We have been working closely with the SA Government this year, aligning our business plan to develop high-grade iron ore production in the Braemar with the government’s emerging strategy to create a green steel industry in the state on a foundation of renewable energy and green hydrogen production.

“This approval by the SA Government Cabinet to advance our proposal to access this wastewater source, with exclusive negotiating rights, is extremely encouraging and represents the first material support by the SA Government for Razorback ahead of the planned submission of our mining lease proposal in the new year.

“Being acutely aware of the arid environment in which we will operate, we take our water stewardship obligations seriously.

“Beneficially using wastewater from Murray Basin salt interception schemes would contribute to a circular economy and is fully aligned with the intent and spirit of our leading ‘foresight’ sustainability platform.”

Next steps

MGT submitted its proposal to the SA Government in April this year, covering actions across four key pillars – access to produced wastewater, access to land, regulatory assistance and funding opportunities.

With approval in the bag, MGT can now proceed to Step 2 of the State’s 3-step Unsolicited Proposal process, which will focus on:

  • The development of a business case and confirmation of approvals pathway;

  • Engagement with SA and Federal regulatory agencies;

  • Technical and engineering programs to accurately define the project;

  • Assessing existing environmental datasets, including hydrogeological modelling;

  • Planning environmental baseline works; and

  • Assessing grant funding opportunities.

MGT has identified a pipeline infrastructure corridor between the mine site and the SPSMB that will follow existing property boundaries and public roads to reduce the potential impact to landowners and the environment, where feasible.

To further assess the suitability of the proposed corridor routing, the company has commissioned Eco Logical Australia to undertake an environmental, social and administrative constraints assessment.

Background of water source

The SPSMB comprises a network of detention basins and salt pans designed for the natural evaporation of groundwater extracted from boreholes within the Woolpunda, Waikerie and Qualco/Sunlands Salt Interception Schemes (SIS).

The primary objective of these SIS initiatives is to regulate salinity levels in the Murray River, ensuring the overall health of the river system and maintaining water quality suitable for human consumption and agricultural purposes.

Commissioned in 1990 and presently under the stewardship of the Murray Darling Basin Authority, the SPSMB covers an expansive area of about 10 square kilometres.

It receives wastewater at an average annual rate of around 10 gigalitres (GL), with the capacity to process up to 12.5 GL per annum.

This wastewater carries high levels of total dissolved solids (TDS), measuring at approximately 19,000 milligrams per litre, and is a compelling opportunity to utilise the water resource directly for magnetite processing or as a potential supply source for desalination, as an alternative to seawater.

Stockyard Plains Salinity Management Basin.

Water test

MGT is carrying out testing to evaluate the suitability of utilising the SPSMB water in the magnetite processing process.

This assessment aims to determine whether this water source necessitates on-site desalination.

The SPSMB area boasts robust existing power supply infrastructure and it is envisaged that pump stations along the pipeline infrastructure corridor can be powered by off-grid hybrid generation solutions to reduce the reliance on extensive power distribution networks.

Furthermore, extensive consultations have been ongoing with a prominent desalination provider to evaluate the potential need for desalinated water in the magnetite processing operations.

Preliminary modelling suggests that a standard desalination set-up for treating SPSMB water will suffice, and MGT anticipates achieving a higher recovery ratio of treated water to brine, when compared to the treatment of seawater.

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