Shree Minerals can commence mining at the Nelson Bay River Iron Ore Project in northwest Tasmania after receiving Federal Government approval under the EPBC Act. The new Minister for Climate Change Minister for the Environment, Heritage and Water, Mark Butler, has granted Shree Minerals the approval to proceed with their proposed iron ore mine.

All necessary approvals are now in place for the DSO operation to proceed, which is timely given iron ore prices are trading around US$130 a tonne, the lower Australian dollar and the low production costs at Nelson Bay River. Shree Mining could be shipping iron ore within the next three to four months.

The approval follows an approval decision made on December 18, 2012 by the Federal Environment Minister under the Environment Protection and Biodiversity Conservation Act was set aside by the Federal Court as a consequence of an application for a judicial review in April 2013. The Court ordered an injunction in May 2013.

A subsequent hearing was conducted and a decision made by the Court in July 2013. Seven grounds of challenge were put up. Three were abandoned during the course of the case. Three were dismissed by the Court. Only one was upheld that the Minister had failed to comply with a mandatory requirement that he consider an approved conservation advice regarding the Tasmanian Devil.

The new minister has undertaken a full assessment and advised of no impediments to begin mining after it was confirmed that Shree had acted in accordance with best practice environmental management, including measures to prevent acid drainage, to protect and enhance wildlife habitat and to minimize the risk of road-kill.

Nelson Bay River is on the west coast of Tasmania, in an area rich with infrastructure including proximity to roads and port. Highlighting the prospectivity of the area, it hosts world-class mines including Grange Resources’ Savage River, Vedanta’s Mt Lyell, Unity Mining’s Henty and MMG’s Roseberry and Avebury.

Nelson Bay River has a goethite-hematite inferred resource of 1.4 million tonnes, magnetite resources of 7.8 million tonnes at 38.3 DTR. Annual production is expected to be about 400,000 tonnes.

The hematite ore is similar to ore found in Western Australia's Pilbara region - low alumina and a premium product and easy-to-extract. The production schedule for the first stage of the project is to develop two relatively shallow open-cut mines to produce direct shipping grade hematite ore, which will require just crushing and sizing. The second stage involves the continuation of mining of the second open-cut situated above the main magnetite ore body.

The hematite oxide cap consists of the central DSO ore section mined in stage one which is surrounded by lower grade ore considered to have potential to produce a commercial beneficiated oxide product.

Shree will then move to the third stage of the project, which involves open-cut mining of the deep magnetite ore body beneath the oxide cap. Earlier studies have demonstrated that the magnetite ore can provide either a dense media magnetite product suitable for coal washery applications or a blast furnace pellet magnetite concentrate.

The mine life for the project based on the current mine plan is expected to be 10 years and has potential to increase with further exploration work.

In May, Shree entered into an offtake agreement with Singapore-based trader Frost Global. Frost will provide US$4 million in funding to progress development of the project by way of an advance towards the supply of iron ore. This will be paid back over the first eight shipments of iron ore, or US$500,000 per shipment.