Billionaire Gina Rinehart has seen off the first shipment of iron ore from her $10 billion Roy Hill project as prices trade around 10-year lows.
The MV Anangel Explorer bulk carrier left Port Hedland on Thursday to deliver its shipment to partner POSCO's steel mills in South Korea this month following a series of delays.
The spot price of iron ore is trading around $US39 a tonne, but Roy Hill says most of its production has been secured under long-term contracts.
Analysts have warned the Pilbara project risks boosting global iron ore supply as Chinese steel demand remains weak.
But Hancock Prospecting executive director Tad Watroba said initial shipments would only represent a small portion of Roy Hill's capacity of 55 million tonnes per annum.
"Over 50 per cent of Roy Hill's output will be taken by the minority investment partners who are outside of China," Mr Watroba said.
"With more than 90 per cent of Roy Hill's production secured under long-term contracts very little ore will actually enter the spot iron ore market."
Mr Watroba said the media and industry analysts were continually overstating the impact the Roy Hill Project would have on the iron ore price.
Hancock chairman Gina Rinehart, Australia's richest woman, said the Roy Hill project was carried out at considerable cost and risk over the past 20 years.
"To put the scale of the Roy Hill iron ore project into perspective in regard to Australia's economy, when the mine is operating at its full capacity, Roy Hill will generate export revenue significantly greater than either Australia's lamb and mutton export industry or our annual wine exports," Mrs Rinehart said.
Roy Hill, which has more than $US7.2 billion in debt funding, plans to ramp up to its 55 million tonne capacity within 18 months, a feat which has not been achieved in the Pilbara.
