Gindalbie Metals Ltd., a mid west iron ore miner, has signed a deal with Queensland Rail Freight to transport iron ore from its Karara project in Western Australia. The deal, worth $A1.17 billion, is expected to be announced formally today. Reportedly, the deal is for ten years and is considered as one of the largest individual long term contracts for the Karara Project.

Gindalbie reported today that the company has appointed Queensland Rail Freight as the exclusive provider of rail operations for its flagship Karara project. As the exclusive provider of rail operations, QR Freight will cover the transport of iron ore by rail from Gindalbie's Karara project to Geraldton Port and further to Oakajee Port for next ten years. Queensland Rail Freight is a national bulk freight haulage business unit of Queensland Rail.

According to the sources close to the matter, initially QR freight will haul 8 million tons of concentrate and 3 million tons of direct shipping ore per year. But Gindalbie expects that it could be as much as 30 million tons per year in future depending on the production at Karara.

"The future growth options will include the opportunity to dovetail the expansion of the Karara project with the availability of new port and rail infrastructure to be developed by Oakajee Port and Rail," said Gindalbie.

The Karara project in Western Australia is a joint venture between Gindalbie and Ansteel of China. Gindalbie said that it would start producing the iron ore by late next year.