Fenix takes on community challenge in WA’s Mid West

With its iron ore mining activities underway and a company-owned logistics business sending off ore to the Port of Geraldton, Fenix Resources has already made a merry turn from explorer to producer. But a quick profit and exit-stage-left is not on the cards, as Fenix builds towards becoming a key cog in rejuvenating a well-known coastal port region in Western Australia.

Fenix Resources Executive Chairman John Welborn says that his company is like a lot of junior explorers and finds the ASX to be a meeting place for opportunities and welcome capital.

He says when the Australian Securities Exchange works well, it enables the development of stranded deposits, and that’s what Fenix was all about when operating at the high-grading Iron Ridge Mine in Western Australia.

But it was when WA company Fenix shook hands on a $25 million deal with Mount Gibson to take on its hematite iron ore mining and infrastructure assets on Australia’s west coast that a greater vision of the company began to take form.

And Fenix’s actions away from the rock and drill have shown its intention to set up for a long stay in WA’s Mid West, with an opportunity in hand to become the region’s preeminent iron ore player.

Shine of the Mid West

Mining is not the only challenge Welborn has kitted up for, being the first West Australian to represent his nation in rugby union. In a subregion east of Geraldton port, the businessman saw another opportunity to take a leap for the Sandgroper state.

“The success of our developments at Iron Ridge had given us the opportunity to build a bigger business, and into most successful iron ore miner in the Mid West,” he explains.

“By some distances around Gibson, they produced 50 million tonnes a year from two mines and had invested hundreds of millions of dollars of infrastructure.

“We were delighted to be able to have the opportunity to acquire the Shine iron ore mine, and particularly the significant infrastructure assets of the port and the rail sidings in the Mid West.”

The greater motivation was an intention to unlock the region’s stranded iron ore deposits, other commodities, and build Fenix into a much bigger business.

Shine was not quite the lay-up that Iron Ridge proved to be, with the latter being one of the highest-grade iron ore mines in mainland Australia.

But Fenix’s investment and hard work paid off, and the decision was made to restart mining at Shine and take advantage of its profit margins.

“The ore body is more complex, it’s not Iron Ridge and we recognised it was a more challenging operation,” Welborn notes.

“We spent 12 months studying it, it’s a shovel-ready project, so the capital requirements are not massive in that regard.

“And we got to the point where the actual decision was very easy, we’ve got strong confidence in our ability to generate a significant margin at Shine.”

When asked what the scale potential is for Fenix to keep building operations, either through exploration or more established assets, Welborn notes the company’s infrastructure and logistics have allowed it to approach things in an opposite direction to most junior miners.

“Most mining companies or exploration companies start with huge deposits that they didn’t try and work out what scale they needed to operate, or what investment they need to unlock them. We’re almost the opposite,” he explains.

Welborn calls the six million tonnes of reserve at Iron Ridge, 15 million at Shine, and 10 million at Beebyn-W11 deposit a modest total, but the company’s expansion is far from done.

“We’ve got fantastic infrastructure, we’re currently running numbers on more than a hundred projects in the Mid West,” he says.

“We are looking for more tonnes because we want to build out production capacity and mine life.

“And the good news is that we are surrounded by stranded projects and there’s enormous opportunity for us to expand and that’s going to be a key focus.”

Regional roots

Like many West Australians, Welborn was born in Subiaco, and he’s familiar with Geraldton through familial connections with one of the state’s centuries-old industries, cray fishing.

Fellow executive director Craig Mitchell was himself born in the Mid West port town of Geraldton, with multiple more personal connects within the company and its staff.

But Welborn says those connections are almost coincidental when asked about his company’s extensive community work in training, educating, and teaching community members both discipline and life skills – activities junior resources companies rarely undertake.

“I think the opportunity and the values that we bring really drive our community investment rather than any parochialism around Geraldton or the Mid West,” he says.

“We’re really proud of our active community engagement. We’re a partnership business, so we see it as fundamental. It starts with our relationship with the traditional owners and the strength of the company is the connections we have with our workforce and therefore the community.”

Welborn says opportunities in the region have been long identified but somewhat forgotten because the wider majority hasn’t gotten around to acting on them.

“I think there’s a lot of exciting things going on in the Mid West and we want to be an enabler of the economic expansion in a growing area,” he says.

“The government is investing more than $300 million in Geraldton port. We want to leverage that with our infrastructure.

“Main Roads is making huge investments. The Mid West rail network isn’t running at capacity. We want to be part of all that investment, we think the region’s a great place to build employment opportunities and local development is a key part.”

Iron expansion

Fenix announced its third mine at Beebyn-W11 on Thursday after a feasibility study confirmed the cash flow and financial returns it wanted to see.

And while there remain challenges to fill a regional roster if expansion goes to plan, that is where its community investment could bear tangible fruit.

“The expansion of our business in the next 18 months is really challenging for us in terms of workforce, we are going to need to recruit twice as many drivers,” he says.

“We’ve created more than 200 jobs in the Mid West in the last four years since we started, and we’re probably going to double that if we’re successful.

“And so we’re constructing housing in Geraldton, we’re thinking about broader lifestyle requirements and that’s what drives our investment in a whole range of things.

“The sponsorship of the Fenix Geraldton Buccaneers team, the partnerships we have, our trading academies and a whole range of investments have all been designed around creating capacity in the Mid West.”

Please note the following valuable information before using this website. 

Independent Research 

Market Open Australia is intended to be used only for educational and informative purposes, and any information on this website should not be taken as investment advice or guidance. It is important to conduct your own research before making any investment decisions, which should be based on your own investment needs and personal circumstances. Any investment decisions based on information contained on this website should be taken in line with independent financial advice from a qualified professional or should be independently researched and verified.