Iron Road has scrapped plans for a substantial rail project on the Eyre Peninsula

A 145km rail line proposed to link the centre of Eyre Peninsula with Cape Hardy on the coast has been scrapped by proponent Iron Road in a bid to cut costs.

Andrew Stocks, managing director of Iron Road.

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A 145km rail line proposed to link the centre of Eyre Peninsula with Cape Hardy on the coast has been scrapped by proponent Iron Road in a bid to cut costs.

The company had initial ambitions for a $US4 billion project called the Central Eyre Iron Project, linking together an iron ore mine near Wudinna, a rail line and a port at Cape Hardy, to mine and export iron ore.

A cooling of Chinese investment globally has led the company to scale down its project, and on Monday it announced trucks would be used instead of a rail link, if the project were to be developed.

Iron Road told the ASX that “high-capacity, dual-powered road trains” would be used to transport iron ore over the 136km from the proposed mine to the proposed port.

The trucks would operate on a privately-owned haul road.

Iron Road said in January it had scaled down the proposed size of the mine, halving annual production from 24 to 12 million tonnes of ore per year.

The company announced last year that it was pursuing a “grain first” strategy with respect to the Cape Hardy port, and was working with a local bulk handling cooperative about establishing a grain export business.

The project was now slated to cost $US1.74 billion overall. The project was scaled down in order to make it more accessible to a wider range of potential investors, the company said in January, which it reiterated on Monday.

Iron Road shares bounced on the news, up more than 22 per cent at 8.6c.

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