Aquila Says Resource at Iron Ore Project Rises 32%

By Jesse Riseborough

April 24 (Bloomberg) -- Aquila Resources Ltd., seeking to develop a $3.9 billion iron ore mine, port and rail operation in Western Australia, said the estimated resource at the project rose 32 percent.

The West Pilbara project is estimated to contain 649 million metric tons of ore, Perth-based Aquila said today in a statement to the Australian stock exchange. An advanced development study is due to be completed by mid-2010, it said.

An initial study completed last May found the West Pilbara mine in Western Australia could produce 25 million metric tons a year from 2012. Aquila, which has a 50 percent stake in the project, today said first production is scheduled for mid-2013.

Preliminary accords for sales contracts with six Chinese and Korean mills have been signed and the company is in talks with several other Chinese and Japanese mills, Aquila said. The company is seeking to develop the project in a venture with American Metals and Coal Industries Inc., or AMCI.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net