September 06, 2008

Sinosteel and Midwest extend iron ore sales agreement

West Perth based Midwest Corporation Limited announced that it extended a sales agreement with China’s Sinosteel Corporation Group for 1.6 million tonnes of iron ore to March 31st 2009. Midwest has shipped 1.1 million tonnes of iron ore fines to Sinosteel as part of the existing contract and expects to negotiate lengthier contracts with Sinosteel in 2008 in conjunction with discussions on the Weld Range JV ore.

Mr Bryan Oliver CEO of Midwest said that "This extension further confirms the strength of our relationship with Sinosteel as a customer and JV partner."

The extended sales agreement with Sinosteel follows a significant recent increase in iron ore reserve to 8.4 million tonnes at an average grade of Fe 58% for Koolanooka Blue Hills. The 1.6 million tonnes of lump and fines will come from Midwest's stage 2 operation at the Koolanooka/Blue Hills DSO project. This upgrade in reserves provides a substantial basis for the proposed expansion of hematite iron ore sales to Sinosteel from 1 million tonnes per annum to 2 million tonnes per annum. This expansion is expected to coincide with the transition to open pit mining production at the Koolanooka-Blue Hills DSO project and the completion of the new ship loader at Berth 5 at the Port of Geraldton.

Midwest is currently seeking various statutory approvals for Stage 2 and expects to commence operations in early 2008 once these approvals have been granted. Tenders have closed for mining crushing and screening operations.

Sinosteel is involved in the management and funding of significant studies JV programs with Midwest at the much larger Weld Range Hematite and Koolanooka Magnetite Projects. It is one of the largest steel industry trading organisations in China and in 2006, it imported in excess of 21 million tonnes of iron ore.