Magnetite’s Rise: A New Era in Western Australia’s Iron Ore Industry
- Noel Ong
- Mar 14
- 7 min read
Updated: Mar 22
Western Australia’s iron ore landscape is undergoing a significant transformation as magnetite emerges as a major player in the sector. For years, hematite has been the dominant force in the industry, but recent developments are signalling a shift in market trends.
(Source: Andrew Todd, "Billionaires bullish on magnetite as new hematite discoveries slow," The Sydney Morning Herald, November 4, 2024. Read the full article here.)
The magnetite phenomenon has been in my mind for a while now, and since getting back into the market with Cyclone Metals Limited (ASX:CLE), I am starting to see that the Australian market is finally embracing the cleaner iron-ore process. My first involvement with Iron-Ore was around 2005, and as I have mentioned in my posts, the magnetite business was new in 2007 for me and, in a large part, for most of the people I worked with at that time.
The Sydney Morning Herald article, which I missed when it was first published, was a great summation of the West Australian/Australian magnetite rise to favouritism. It has not gone unnoticed that this generation of a bullish tone is driven by the top end and not driven by the small-cap companies.
Fortescue Metals Group Making a Statement: A Changing Market Dynamic
Hematite has long been favoured due to its naturally high iron content, typically ranging between 60% and 63%. However, new hematite discoveries have slowed, prompting miners to revisit magnetite, which occurs at lower grades (20-30%) but can be beneficiated to produce a high-grade product exceeding 66% iron content. This beneficiating process was always looked upon as a barrier to the market, but it seems that this is no longer mentioned, which is interesting. For those who may not know, magnetite does occur in very high grades, as in up to 70%.
Fortescue Metals Group (ASX:FMG) has led the charge, investing US$3.9 billion in its Iron Bridge magnetite project in Western Australia (Figure 1). Despite the high capital expenditure required to process magnetite, FMG achieved a premium of US$28 per dry metric tonne for its magnetite product in the September quarter compared to hematite. This significant price difference is driving renewed interest in magnetite (source: Sydney Morning Herald).
Figure 1: Fortescue Metals Group’s Iron Bridge Magnetite Project (Source: Fortescue Metals Group: Iron Bridge Project.)
What is interesting is that when the iron ore boom started in the early 2000s, FMG was being doubted by the majority of commentators in the industry due to technical deficiencies and the inability to sustain the funding for the business. In 2025, Andrew Forrest has proven everybody wrong and done astonishingly well.
As I observe him transitioning into magnetite, I wonder what insights he has about the market now compared to when he first began, which fueled his initial drive. Could he be aware of shifts in demand from China, given his close ties to the Chinese market? While the green iron concept is still viewed as inferior by traditional haematite iron ore enthusiasts, might he possess knowledge that aligns with his vision?
Not One Billionaire But Two: Andrew Forrest and Gina Reinhart are Backing Magnetite as Well.
As I mentioned, the staggering highlight about this story is that it is being driven by the billionaires, and not just any billionaires, but Iron Ore Mining magnates Andrew Forrest (Figure 2) and Gina Rinehart (Figure 2A).
Andrew Forrest's Iron Bridge magnetite project, which first produced and shipped ore in 2022, is located 1435 km south of Port Hedland on Nyamal Land in Western Australia. It is a magnetite mine owned by a joint venture between FMG Magnetite Pty Ltd (69%) and Formosa Steel IB Pty Ltd (31%).
The mine has a capacity of 5-9 Mtpa and produces a high-grade wet concentrate product that is transported to Port Hedland through a 135-kilometre-long specialist slurry pipeline.
Figure 2: A perfect identification of Andrew Forrest, which makes the March 2025 Time magazine a perfect read. (Source: Time Magazine)
The Iron Bridge site is aiding Fortescue's shift towards Real Zero, aiming to be the first magnetite deposit to run on renewable energy by 2030. Fortescue Real Zero is the plan to eliminate the company's scope 1 and scope 2 emissions across FMG's Australian iron ore operations, without voluntary carbon offsets.
For the benefit of our planet, our shareholders, and future generations. -FMG
Gina Rinehart’s Hancock Prospecting has taken a controlling stake in the Mt Bevan magnetite project, a multi-billion-dollar operation north of Kalgoorlie. The project boasts an estimated 1.29 billion tonnes of magnetite and a 25-year mine life, with iron content potentially exceeding 70%, making it highly attractive to global steelmakers.
Figure 2A: Gina Reinhart is making waves in the Magnetite Sector. (Source: Forbes Magazine)
Notably, Legacy Iron Ore, which retains a 29.4% interest in Mt Bevan, is backed by India’s state-owned National Mineral Development Corporation (NMDC). With Indian Prime Minister Narendra Modi discussing the project’s significance with Rinehart, it is clear that magnetite is becoming a strategic resource for global steel production.
Figure 3: Mt Bevan Magnetite Project Map (Source: https://legacyiron.com.au/projects/mt-bevan/)
This project has been around for decades and came into notice during the last iron ore boom in 2005. As I have mentioned in previous blogs, projects such as this have been spending the last two decades trying to find a solution, so is the time to shine happening in the form of companies like Hancock Prospecting and FMG?
Yilgarn and Esperance: The New Iron Ore Frontier
As we talk about the magnetite projects, I am starting to imagine what it would have been like for the ports, such as Esperance, if the iron boom of 2005 had been sustained. There are several iron ore deposits in the Yilgarn that would have required an exit to market through Esperance, so if it is happening, the region may add iron ore to its suite of economic commodities.
Figure 4: Map of Western Australia’s Iron Ore Regions (Source: https://www.researchgate.net/figure/ron-Ore-Deposits-and-Oakajee-Location-Map-Western-Australia_fig6_266318573)
In 2025, the emergence of large-scale magnetite projects in the Yilgarn region suggests that Western Australia’s iron ore industry will be expanding beyond the traditional Pilbara stronghold. Companies such as Macarthur Minerals Limited (ASX:MIO) are making moves in the region with the Lake Giles Moonshine magnetite project, which holds over 1.2 billion tonnes of iron ore resources (Figure 5). However, looking at the corporate activities, I am not sure if this will become a reality.
As the market improves, numerous hopefuls will attempt to attract market interest, necessitating a significant amount of DYOR from readers to ensure a sufficient level of due diligence is conducted to understand the anticipated surge of iron ore projects.
Figure 5: The location of the Lake Giles project (source: Macarthur Minerals Limited).
Macarthur’s strategic sale of its hematite assets at the Ularring project to Gold Valley has also unlocked significant financial potential. With offtake agreements in place and export infrastructure available at the Port of Esperance, Macarthur Minerals may indeed be making strategic moves. However, with a market capitalisation of just over AUD $6M, it would need some strengthening of its balance sheet before getting into a business that is traditionally the home of the major mining companies.
Figure 6: Lake Giles Moonshine Project (Source: https://macarthurminerals.com/projects-item/moonshine-magnetite-project/)
It is important to understand that in an industry like iron ore, unless you have a unique project like Fenix Resources Limited (ASX:FEX), the large bulk mining projects of billions of tonnes will never happen for junior companies. Fenix Resources was talking about 6 million tonnes of extremely high-grade DSO material.
When you look at aspiring iron ore miner Cyclone Metals Limited (ASX:CLE), they have a big brother in VALE paying the bills. That is a very big difference in capability to complete the process of mining and delivering greater than 70% Fe pellets to customers.
The Future of Magnetite in WA
As the demand for higher-grade iron ore increases due to environmental and efficiency concerns in steel production, magnetite’s ability to produce a cleaner, high-purity concentrate is a major advantage. As I mentioned previously, with iron ore billionaires leading the charge and infrastructure in place to support large-scale exports, magnetite could play a central role in Western Australia’s next iron ore boom.
The magnetite revolution is no longer a question of “if” but “when.” As more companies enter the space and technological advancements make beneficiation more cost-effective, the Yilgarn region and the Port of Esperance could soon rival the Pilbara as a powerhouse for iron ore production.
(Source: Andrew Todd, "Billionaires bullish on magnetite as new hematite discoveries slow," The Sydney Morning Herald, November 4, 2024. Read the full article here.)
5.0 Samso Concluding Thoughts
The magnetite evolution, or rather re-evolution, is looking more interesting by the day. Companies like Champion Iron Limited (ASX:CIA) in Canada are making a lot of money selling these iron pellets at close to 74% Fe content and making a lot of cash. Apart from FMG and CITIC (Sino Iron Project), there are no other players in the magnetite sector. The South Australian Green Iron initiative is still in its infancy stage, so the scene is set for some interesting scenarios for investors.
In my opinion, the establishment of an iron ore mining scenario is a long-term proposition in creating it and also in the benefits of revenue. As retail investors, we are going to have to find someone that has enough leverage, and betting on FMG is almost the only option, unless you look at the potential of Fenix Resources Limited (ASX:FEX) making a play for this sector in the future.
The other options are Champion Iron, but are they overpriced? The next option is the new kid on the block with Cyclone Metals Limited.
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