Blue hills

The small scale Blue Hills open cut hematite mine, east of Geraldton in the mid-west region of Western Australia, is currently in production after being previously delayed owing to a drop in iron ore demand from China. The mine owner, Sinosteel Midwest Corporation (SMC), is a wholly subsidiary of China's state owned Sinosteel Corporation.

Blue Hills Development Approved in 2010

The Blue Hills mining operation was approved for development by the Western Australian government in early 2010. Sinosteel Midwest Corporation commenced development of the DSO (direct shipping ore) mine soon after, in April of the same year. Production from the mine was deferred in October, 2012 with the company citing low world iron ore prices as the reason. However, improved demand for iron ore, plus the results of a Value Improvement Study conducted by SMC in late 2012, showed how to reduce costs. This gave the company the confidence to finally put the mine on a production footing.

Mining Commenced at Blue Hills in August 2013

The Blue Hills mine commenced production in August, 2013, with mining contractor, MACA, being awarded the contract to operate the mine that consists of two open pits, along with the crushing and screening of the ore. B and J Catalano was awarded the road haulage contract to take the ore from the mine site to the port at Geraldton from where it is shipped to the company's Asian customers.

The Blue Hills mine is expected to produce around 1.4 million tonnes of hematite ore a year for the next three years as it has an estimated iron ore reserve of 3.18 million tonnes that exists in two adjoining iron ore tenements at Mungada in the Perenjori Shire. The ore is crushed and screened on-site before being transported to SMC's own storage and ship loading facilities at the Geraldton port.

MACA Awarded the Contract to Operate the Blue Hills Mine

Mining contractor MACA employ 46 personnel at the Blue hills mine who carry out drilling, blasting, loading and haulage from the pit to the processing plant where it is crushed and screened. The mine is one of the smallest mines being operated by MACA, in regard to annualised revenue, it therefore only requires a small mining fleet to be supplied and maintained.

Blue Hills Mine Owner SMC is one of the Smaller Mining Companies

SMC is a small organisation in Australia when it is compared to some of the major mining companies such as Rio Tinto, BHP Billiton and Fortescue Metals but it does have extensive land tenure with a considerable DSO resource.

It had been planned to bring the Blue Hills mine into production in early 2013 to take the place of the SMC owned Koolanooka mine, 60 kilometres to its west, that was due to be mined out in February. This would have created a continuation of the ore supply. However, the position of the iron ore market at that time forced the company to defer the opening of Blue Hills mine until August 2013.

Mining had previously taken place at the Blue Hills mine site during the 1960's and 1970's by Western Mining. The Blue Hills operation is taking place in un-rehabilitated open pits left abandoned at that time.