Under a Memorandum of Understanding between Royal Resources and the Flinders Ports, 10 million tonnes could be shipped through our town yearly.

The memorandum gives access to a choice of two existing, open-user ports - Port Pirie and Port Adelaide - and one proposed port - Port Bonython.

It would create 200 direct jobs in Port Pirie, according to the company.

Residents will greet the news with cautious optimism after the collapse of a previous iron ore export project in the city earlier this year.

The managing director and chief executive officer of Royal Resources, Marcus Flis, spoke to The Recorder about the company’s plans.

"There are still many things to be considered at this early stage, but Port Pirie is the most obvious choice for us at the moment," he said.

"The initial idea is to have a storage facility outside Port Pirie, for stock purposes. From there, the pathways are being looked into right now."

He said the company would ship 10 million tonnes yearly which could mean 200 rail movements a year in our town, depending on the size of the trains.

"We could have a smaller start in the first years of this project, though," he said.

The Razorback Iron Ore Project is a big magnetite deposit located between Peterborough and Broken Hill. It is fully owned by Royal Resources.

"The project has an exploration target size of 4800 to 8000 million tonnes in an infrastructure-rich area that has access to nearby existing open-user rail, port, power, gas, heavy engineering and dormitory towns," Mr Flis said.

"The mineralisation style is a bedded magnetite."

"It is significantly softer than banded iron formation ores. As a result, this outcropping resource will be low cost to beneficiate and mine which, together with the available infrastructure, means a low capital cost compared to its peers," Mr Flis said.

"It is a possibility that if the shipping is done through Port Pirie, we would have a base operation centre in town, for exporting facilities.

"We don’t want to spread the activities too widely. We would rather centralise our operations in one area.

"One thing is certain about the Razorback project: no matter what model we use, Port Pirie will benefit."

The decision on whether the shipping will come through Port Pirie will be made next year.

The company will move to the development stage in 2013 and move into production in 2015.