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- Fortescue Metals (FMG) has completed the long-awaited assessment of its Iron Bridge Magnetite Project, which is due to begin production by December next year
- The 12-week technical and commercial evaluation began in February with the aim of validating the project’s capital cost and schedule
- Overall capital expenditures continue to increase and are now expected to be between US$3.3 billion and US$3.5 billion (between A$4.26 billion and A$4.52 billion)
- Fortescue said the blowout “reflects project-specific and market factors impacting materials and installation costs”
- Once first production begins in late 2022, it’s anticipated that it will take an additional 12 to 18 months to reach the projects full production run rate
- Shares in Fortescue Metals are up 0.63 per cent to $22.41 as of 1:09 pm AEST
Fortescue Metals (FMG) has completed the long-awaited assessment of its Iron Bridge Magnetite Project, which is due to begin production by December next year.
The 12-week technical and commercial evaluation began in February with the aim of validating the project’s capital cost and schedule, resetting its contractor strategy, de-risking logistical processes and confirming transport solutions.
It’s held under a joint venture between FMG Magnetite, which holds a 69 per cent stake, and Formosa Steel IB, which owns the remaining 31 per cent, and will produce 22 million tonnes of magnetite concentrate each year at a grade of 67 per cent.
Chief executive Elizabeth Gaines said Iron Bridge represents a strategic investment with compelling returns for both Fortescue and it partner, and further enhances the company’s ability to meet strong demand from its customers.
“The iron ore market fundamentals support the investment in the Iron Bridge project, and we anticipate strong demand for this high value-in-use product, which will attract a premium to the Platts 65 per cent Fe CFR Index,” she said.
However, the cost of the project continues to soar. Overall capital expenditures are now expected to be between US$3.3 billion and US$3.5 billion (between A$4.26 billion and A$4.52 billion) — well above an original cost of US$2.6 billion (roughly A$3.36 billion) that had been in place until January.
In a statement this morning, Fortescue said the blowout “reflects project-specific and market factors impacting materials and installation costs, including inflation, foreign currency exchange rates and labour constraints”.
Once first production at Iron Bridge begins in late 2022, it’s anticipated that it will take an additional 12 to 18 months to reach the projects full production run rate.
Shares in Fortescue Metals are up 0.63 per cent to $22.41 as of 1:09 pm AEST.
