BC Iron Limited (BCI) approved the development of its Nullagine iron Ore Project after it had completed the feasibility study. The iron ore producer said the project, located in the Pilbara region, is an economically and technically robust direct shipping ore project, which would produce at an initial rate of 1.5 million tonnes per annum (Mtpa).

BC Iron said production would ramp up to 3Mtpa before increasing to 5Mtpa as roads and infrastructure are upgraded.

Production at Nullagine remains subject to acceptance of the study by probable joint venture partner Fortescue Metals Group Limited and appropriate project finance being secured.

BC Iron said first production is targeted for the second quarter of 2010 when shipping from Port Headland commences.

Managing director Mike Young said the decision represented a positive achievement for the company after being listed on the ASX for less than three years.

“In a very short space of time we have defined a premium high-quality iron ore resource, completed a scoping study, secured an off-take agreement, formalised an infrastructure agreement with FMG and now completed a feasibility study,” Mr Young said.

“The development of the Nullagine Project will also bring significant new investment, employment and opportunities to the region, benefiting all stakeholders.”

At 1044 AEST, BC Iron shares were down 3.5c to $1.025.