The Savage River iron ore mine in north-west Tasmania will go underground next year in a scaled-back plan that keeps it open into the next decade.
Grange Resources today committed an initial $101 million to a sub-level cave at the mine, about 100 kilometres south-west of Burnie.
Open-pit mining roles will be reduced progressively as those operations wind down towards completion in 2028.
Grange said it would keep consulting workers about the changes.
Grange has not said how many roles will go or whether the underground mine will create new jobs.
The new mine is much smaller than the $891 million underground plan, centred on a block cave, that Grange’s board approved in February 2024.
That mine was expected to run for 15 years. The board approved the plan but never made a final decision to build it.
Grange delayed the block cave in December 2024 as iron ore prices fell.
In May this year, it said its major shareholder would not back the project financially at this stage.
Grange chief operating officer Ben Maynard said the company had reviewed other ways to move underground.
“The review demonstrated that commencement of underground mining via SLC is the best option to reduce funding requirements and external debt while preserving long-term value for shareholders,” he said.
“The SLC delivers a positive return across a range of iron ore prices, requires materially lower upfront capital than the block cave and can be substantially self-funded, while retaining the pathway to a larger operation in the future.”
A sub-level cave mines ore in smaller sections, one level at a time.
A block cave mines a much larger block of ore from a single level at the bottom of the mine.
Shelving the larger mine has already hit Grange’s books.
In August, the company wrote down its Savage River assets by $690.7 million before tax.
It blamed the switch to the smaller mine, which it said had shortened the mine’s life and lower forecast iron ore prices.
Grange said a future block cave or another development could still take the mine beyond 2040. Environmental approvals for underground mining are already in place.
Maynard said the decision was a significant investment in the company’s Tasmanian operations and the community.
“It secures our ability to continue supplying high-quality pellets to customers well into the next decade and maintains our options as we build the foundation for a large-scale underground mine,” he said.
Grange will now look to award mining contracts and mobilise as soon as practical.
“At the same time we will progress studies, optimisation and funding work for future stage decisions,” Maynard said.
