Gina Rinehart's Roy Hill mine 'will ship its first iron ore cargo on 21 October'

Gina Rinehart Photo: Getty Images/ Matt King.

Australia’s Roy Hill iron ore mine, majority owned by Gina Rinehart’s Hancock Prospecting, looks set to deliver its maiden iron ore shipment before the end of the month according to one of the project’s key investors.

“Roy Hill will ship its first iron ore cargo on 21 October, according to POSCO, a shareholder in the mine and recipient of the cargo at its south Korean mill,” said Matthew Hope, a research analyst at Credit Suisse, in a note to clients.

“JV partners, POSCO, Marubeni and China Steel Corp will take 50% of the 55 million tonnes p.a. output, the remainder is intended to be sold in China.”

The project, commenced in mid-2011, has an initial mine life of 17 years according to the Roy Hill website.

Contractor Samsung CT sent hundreds of workers to the Pilbara site earlier this year to help meet a deadline for making a first shipment in October.

The transition from the construction to the production phase comes at a challenging time for the company. Iron ore prices have fallen heavily since construction began in 2011, tumbling 70% over the past four years.

Over the same period, seaborne exports, particularly from Australia, have surged. According to data released by the Pilbara Ports Authority, exports from Port Hedland, Australia’s largest iron ore loading port, nearly doubled in the four years to September 2015, rising from 20 million tonnes to 39.4 million tonnes, the highest level on record.

Last week analysts at Citibank described the addition of ore mined from Roy Hill as an “impending whale” for seaborne supply. The increase, coming at a time where “Chinese steel mills face some of their worst conditions ever,” could see iron ore prices slump below the $40 a tonne level in the first half of of 2016, Citi said.

According to Metal Bulletin’s iron ore index, the spot price for benchmark 62% iron ore fines currently sits at $53.14 a tonne, more than 20% below the price it traded at the beginning of 2015.

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