Western Plains Resources Ltd will be selling a total of 9 million tonnes of iron ore fines over a period of five years from its Peculiar Knob project in South Australia.

Western Plains said it has signed a Memorandum of Understanding (MOU) with customers and the sales will begin in the second half of 2011. The MOU agreements contain provisions to extend the life of the sales arrangements beyond five years, under agreed circumstances.

"It is WPG's and its customers' intention that these non binding MOUs will be converted into binding sales contracts when the commitment to project development is taken. Sales will be made at market clearing prices on a quality adjusted basis, using a mix of CNF and FOB pricing," said Western Plains in a statement.

Earlier this year, Western Plains entered into an MOU agreement with Flinders Ports Pty Ltd for the handling, storage and shiploading of iron ore from Peculiar Knob. Both parties agreed to develop a detailed set of protocols for the export of ore before the end of first half 2010.

Western Plains estimates exports sales from Peculiar Knob for at least 2-3 million tonnes per annum. Peculiar Knob project is located south of Coober Pedy in South Australia.

Western Plains believed that "Peculiar Knob is the highest grade undeveloped direct shipping iron ore deposit in Australia, with the lowest levels of the key impurities alumina and phosphorus."

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