Asia Iron land officer and former Mid West estate agent, Ian West, said the property was bought for the Asia Iron Extension Hill project about 85 kilometres east of Perenjori and wouldn't affect farm production in the area.

Mr West said the land holding which straddled titles in Three Springs and Perenjori would allow access for Asia Iron subsidiary, Extension Hill Pty Ltd to build a 330kV powerline from Three Springs to power the Extension Hill magnetite operation.

The powerline was flagged to be similar to the one already connecting Gindalbie-AnSteel's Karara Iron Ore project to the Three Springs townsite.

"It's common knowledge the deal has been settled and the property will be re-leased back to a farmer since those who sold it are retiring," Mr West said.

"The land was bought for a specific purpose because it's not land marked to be mined and is a means to an end really.

"There will be little to no farm production loss because the land will be put back into the hands of a farmer."

Mr West's role at Asia Iron entailed tying up the property deeds required for mine powerlines, access roads, slurry pipes and assisting infrastructure.

Primaries Geraldton selling agent Max Correy said while it was a major land purchase by the mining company, only a small percentage of it would be used for the power line and 95-98 per cent of it would be put back into the hands of a paying leaseholder.

"In terms of foreign ownership I think it's different to the situation some growers are facing south of the State," Mr Correy said.

"At the end of the day a local farmer will lease and farm the purchased land and there will be no question of foreign food security issues."

Mr Correy said the mining company's land purchase was a value adding strategy and the mine would create jobs for local residents in the near future.

Asia Iron owns the Extension Hill lease in the Mt Gibson Ranges.

Mining company Mt Gibson Iron is a current tenant on Asia Iron's Extension Hill lease and is charged with mining the first layer of hematite iron ore from the Extension Hill project.

About 15 million tonnes of hematite will be removed by Mt Gibson Iron during the next five or six years before Asia Iron can mine the magnetite underneath.

The company is also set to build a pipeline from Extension Hill to Geraldton to shift the magnetite slurry.