Fortescue Metals Group Limited (ASX: FMG) announced that its board has approved the development of the West Australian Eliwana mine and rail project, estimated to cost $US1.275 billion.
Fortescue is one of Australia’s largest iron ore miners, alongside BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO). Iron ore is a key ingredient used to make steel.
Based in the Pilbara region, the Eliwana project includes 143 kilometres of rail and a 30 million tonnes per annum processing facility.
Fortescue CEO Elizabeth Gaines said, “Development of the Eliwana Project will maintain Fortescue’s low cost status, providing us with greater flexibility to capitalise on market dynamics while maintaining a minimum 170 million tonnes per annum production rate over 20 years.”
Fortescue plans to pay for the project from operating cash flow over three years, at a capital intensity of $US42 per tonne. It says ore from the project will be a premium quality to that produced at Fortescue’s other mines.
“This Project allows us to commence the supply of Fortescue Premium product to the market from existing operations in the second half of FY19 with volumes increased as Eliwana ramps up to full production,” Gaines added.
Fortescue has shipped more than 1 billion tonnes of ore from the Pilbara region in 10 years.
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