Gindalbie Metals Ltd
(ASX:GBG) has signed a heads of agreement for Queensland Rail to provide bulk rail haulage services for Gindalbie’s Karara Iron Ore Project in Western Australia.
Under the deal, QR Freight has been appointed as the exclusive provider of rail operations for the initial tonnages of magnetite concentrate and will haul all iron ore from Karara to Geraldton Port.
Gindalbie says the 10-year deal will initially be for 8 million tonnes of concentrate and 3 million tonnes a year of direct shipping ore but has the option to grow to 30 million tonnes a year.
Gindalbie Managing Director Garret Dixon says the contract with QR Freight has a value of several hundreds of millions of dollars over the 10-year period.
Future growth opportunities include expanding the Karara project with the development of new port and rail infrastructure.
Karara, which is a 50-50 joint venture between Gindalbie and China's Ansteel, is expected to start production late next year.
Gindalbie Metals booked a profit of $26.22 million for fiscal 2009.
