Melbourne (Platts)--17Feb2011/205 am EST/705 GMT

Australia-listed Brockman Resources has been granted final environmental approval by the state government of Western Australia to develop its wholly owned 20 million mt/year Marillana hematite iron ore project in the worldscale Pilbara production region.

The approval paves the way for construction to begin once the current Bankable Feasibility Study and a Final Investment Decision are completed in the third quarter of 2011, Brockman said Thursday. Marillana, located in the East Pilbara 100 km northwest of the town of Newman, is designed to produce 17 million mt-20 million mt/year of iron ore with a grading of up to 61.5% Fe for a mine life of at least 25 years, with commissioning forecast to begin in early 2014.

The project will generate life-of-mine revenues of more than A$60 billion ($60 billion) at current iron ore prices, Brockman said Thursday.

The site has a proven and probable reserve of more than 1 billion mt of hematite iron ore, the largest published reserve position in the Pilbara outside those held by regional heavyweights BHP Billiton and Rio Tinto and emerging third player Fortescue, according to Brockman.

Marillana's development costs are estimated at A$1.9 billion, including the proposed construction of an 80 km spur line to link the project to Fortescue Metal Group's existing Pilbara rail line to Port Hedland. The two companies are currently in talks to finalize infrastructure and marketing agreements for the Marillana ore.

Brockman and fellow Pilbara emerging iron ore developer FerrAus are also the focus of an unsolicited takeover bid by Hong Kong listed Wah Nam International, a major shareholder in both companies, valued at a total A$1.16 billion. Both companies have recommended shareholders reject the approach.

Marillana will be Brockman's first producing asset. It also has a portfolio of iron ore exploration tenements in the West Pilbara. --Wendy Wells, newsdesk@platts.com

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