An agreement has been arranged between Aurox Resources (ASX: AXO) and the Port Hedland Port Authority (PHPA) for shipping magnetite iron ore from its planned mine development in the region.

The Agreement includes dewatering, stockpiling and ship-loading at the Utah Point Multiuser Facility one of the facilities under development but already in high demand with the boom conditions and anticipated bottlenecks being caused by magnetite, iron ore, chromite and manganese miners starting projects or expanding their exports.

Utah Point will be designed to hold a linear stockpile capable of servicing a shipping operation in excess of 10 million tonnes per annum.

Aurox's chairman Charles Schaus said the company will install and operate its own dewatering, stacking and reclaiming equipment, with the capacity to feed the PHPA out-loading conveyor system at its design rate of 7,500 tonnes per hour.  

Access to port facilities is clearly a critical element in the development of a project such as this - without a port there is no project, Schaus said.

The signing of this agreement further de-risks the Balla Balla project, and keeps us on track toward first shipment of magnetite concentrate in the second half of 2010, he said.

Aurox will transport the Balla Balla magnetite concentrate 110 kilometres from mine site to Utah Point via a buried slurry pipeline, avoiding the traffic, dust and noise associated with a trucking operation.

The slurry product will be dewatered at the port with the majority of process water returned to Balla Balla for re-use. However, a small quantity of water will be retained at the port for dust suppression and wash down purposes.

Aurox will prepay a Port Facility Charge which is refunded by the PHPA through a formulated reduction of port utilisation fees against future Balla Balla tonnage shipped over the Utah Point Berth. The term of the Agreement is 15 years.

Commenting today, Western Australia's Planning & Infrastructure Minister Alannah MacTiernan said the agreement underlines the viability of transparent access regimes for multi-user facilities in supporting new entrants into the resources industry.

She said the agreement will see ore exports initially at 6 Mtpa rising up to 10 Mtpa after five years, using about half the capacity of the new berth, due for completion in 2010.

The Minister said the port has already received commitments for a total of 16.5 Mtpa of capacity for iron ore, manganese and chromite through Utah Point, which is costing $A225 million ($US M) to develop.

There could be 10, or more, smaller-scale exporters using the public facilities to get a foothold in the industry. Some may grow to the point where it becomes economical for them to develop their own infrastructure, she added.