Established in 1970 to take a leadership position in the development of the Robe River iron ore project in Western Australia, Mitsui Iron Ore Development Pty., Ltd. (MIOD), has played a major role in providing stable supplies of iron ore to steel mills, principally in Japan. At present, the Robe River Project is viewed as the worlds most cost-effective and reliable supplier of iron ore, and it has developed to become the fourth largest seaborne supplier to major steel companies. Looking to the future, MIOD is preparing for anticipated growth in demand, principally in the industrializing countries of Asia, by conducting feasibility studies on additional mine sites in Australia and elsewhere.
MIOD, which is 80% owned by Mitsui & Co., Ltd. and 20% by Mitsui & Co. (Australia) Ltd., is one of the principal joint venture partners in Robe River Iron Associates, along with North Limited, Nippon Steel Corp., and Sumitomo Metal Industries, Ltd. Interest in developing Australia’s iron ore resources began to develop in the early 1960s, when surveys showed that reserves were far greater than had been supposed earlier. Interest among steel mills in Japan was especially strong, as the country had no significant iron ore reserves and demand for steel to meet the needs of Japan``s rapidly growing economy was expanding. A central issue was how Japanese mills could procure sufficient iron ore to meet their needs while also implementing massive capital investment programs.
As the main suppliers of raw materials to the steel industry, Mitsui and other sogo shosha took the initiative in locating economical mine sites and undertaking major development projects. One of the first and most significant of these developments was the Robe River Project, in Western Australia. Although it had been determined in the 1960s that the Robe River area was rich in commercially viable iron ore, many challenges had to be overcome before production could begin and the venture realize its full potential. In 1970, MIOD was established with its head office in Perth and, together with other participants, undertook the construction of the mine site, a 200-kilometer railway link to Cape Lambert, processing and port facilities, and two company towns.
The first shipments from the project began in late 1972, and initial annual production capacity was 8 million tons of iron ore (4 million tons of pellets and fines, respectively). Installed capacity had been increased to almost 20 million tons by 1979, but unproductive labor practices made it difficult to break even. Labor difficulties were solved by 1986, and enhanced productivity and other factors made it possible to return a profit and expand production to more than 25 million tons by 1990. Thereafter, the slowdown in the Japanese economy brought a temporary decline through 1993, but production was further expanded in mid 1990s which saw 44.4mt produced in 2003/04. Productivity is at one of the highest levels in the world, at more than 44,000 tons per worker per year.
Australia is best positioned to meet iron ore demand for steel in Japan and many other countries because of its vast reserves and geographical proximity. Accordingly, MIOD has expanded the capacity of iron ore processing facilities at Cape Lambert through the Robe River Project, and such expansion has been further enhanced through the West Angelas Project, located 400 kilometers southeast of Cape Lambert. In addition, Robe River Iron Associates have secured the tenure of additional deposits near the current mine site. MIOD has reinvested its cash flow in the West Angelas Mine, expanded its rail and port capacity as well as examining potential iron ore mine sites in the area with the aim of meeting growing demand in Asia.
