And while the majority of Australian iron ore producers and hopefuls have their eyes firmly fixed on China and India, a Western Australia-based explorer and miner will be looking towards the Middle East and South-East Asia when it starts production in 2010-2011.
If statistics are of any value in the global iron industry then the growth figures for direct reduced (DR) pellets in the Middle East are pure gold.
In 2006 the consumption of DR pellets in the Middle East was 6 million tonnes per annum. With the development of the region and the growth in electric arc furnaces, the estimated consumption for 2008 is 17Mtpa, rising to 35Mtpa in 2012 and 45Mtpa by 2015.
Grange Resources non-executive chairman Anthony Bohnenn has no doubts that his company's Southdown magnetite project near Albany, Western Australia is perfectly positioned to take advantage of this growth.
"We have one of the most advanced projects in Australia, an outstanding resource plus excellent infrastructure," he told RESOURCESTOCKS.
"It would be very different for a company wanting to set up a mine in the Pilbara. Apart from the isolation and limited infrastructure, some have the added government commitment to build a pellet plant in Australia in order to start mining.
"We are located about 90 kilometres northeast of Albany with a magnetite deposit about 12 kilometres in length and a resource base of 479.1 million tonnes containing 37.3 percent magnetite grading 69.2 percent Fe [iron] within the western 6 kilometres of the deposit.
"The magnetite resource within the western section of the deposit is sufficient to support the planned production rate of 6.6 million tonnes per year for 22 years.
"With the 6 kilometre eastern section added to the inventory, we expect to double the resource and anticipate that our mine life will approach 35 years.
That size makes us a significant player in the magnetite market and presents an opportunity to consider expansions to the mining rate."
Bohnenn's optimism is understandable, especially since the company has now successfully negotiated the acquisition of the exploration licence containing the eastern 6km of the deposit from Rio Tinto Exploration.
The deal cost $1 million cash plus a series of shares and options which still made the investment cheap when compared with some recent transactions. It is estimated that Grange paid only 15c a tonne to possibly double its resource while Citic Pacific of Hong Kong paid 26c a tonne in a recent Pilbara deal and MGX sold its interest in Asian Iron Holdings for about 30c a tonne.
If the company has any problem with its Southdown project it is the same problem many miners complain about in Western Australia - the lengthy project approvals of the state government bureaucracy.
Grange Resources commenced its bankable feasibility study in January 2005 and three years later it is still endeavouring to get finalisation on a public environmental review (PER), which was published and released for public comment in February 2007.
But the company has none of the problems associated with some iron ore projects in WA, which have to face isolation from road, rail, power and water resources, not to mention deepwater ports.
The Southdown project is ideally located in the South-West of WA close to a range of facilities, including the magnificent port of Albany.
