Western Australian iron ore company Gindalbie Metals has executed a Joint Venture Development Agreement with Chinese steel and iron ore company, Anshan Iron & Steel Group Corporation (Ansteel), to proceed with development of the Karara Magnetite Project and Mungada Hematite Projects in Western Australia.

The announcement follows the delivery of positive Bankable Feasibility Studies for both iron ore projects, 225km east of Geraldton in the Mid West of Western Australia. The projects involve a total combined investment of up to Aus$1.8 billion in new mining and processing facilities, and associated infrastructure in Western Australia and China.

The agreement was signed by the president of Ansteel, Dr Zhang Xiaogang, and the chairman of Gindalbie, George Jones, in the presence of the President of The Peoples Republic of China, Hu Jintao, and Australia's Prime Minister, John Howard, reflecting the importance of the agreement to both Gindalbie and Ansteel and to the continued development of Australia's iron ore industry.

Gindalbie and Ansteel have agreed to develop the projects subject to the signing of an Equity Joint Venture agreement for the Joint Venture Pellet Plant in north eastern China, finalization of the approval for the decision to mine within two months, finalization of off-take and financing arrangements, and environmental approvals being received for the Australian and China projects.

Subject to the timely receipt of environmental approvals and financing, the Karara Joint Venture is aiming to begin exports of hematite ore through Geraldton in the first quarter of 2009 and deliver first ore from the Karara Magnetite Project by the first quarter of 2010.