Fortescue Metals Group continued its successful and meteoric progress (IM, April 2008) in May. The first ore on ship (FOOS) was achieved as scheduled on May 15, marking a significant milestone for the project and importantly signalled the commencement of cash flow.
There were no lost time injuries reported during May. Overall project completion was assessed at 96.7%. The focus going forward is to reach project completion as described within the bond indenture which is described as the achievement of 2 Mt of product mined and shipped within a consecutive four week period. Given the current schedule the company is working toward, it is expected that project completion will be achieved within two months of FOOS. The Forecast Final Cost (FFC) has been assessed at A$2.825 billion which is an increase of $16.7 million from the previous FFC.
The port works were assessed as 99.4% complete as at end May. FOOS was achieved with the loading of the 170,000 t cape size ship destined for Baosteel in China. On May 9 there was a panamax ship of 70,000 t loaded but this was part of the wet commissioning process as the port’s out loading circuit of product reclaimer and ship loader were load commissioned for the first time. The work focus now is on ensuring that the ramp up to full operational capacity is achieved in a timely fashion.
The rail program was assessed as 96% completed as at end May. During May there were approximately 50 train journeys between the mine site with the 100th journey achieved on June 21. A key focus going forward is to complete the ‘super lift’ of the track ballast which is the process of laying an additional 150 mm of ballast to further base the rail line. This is scheduled to be completed by end July and will then allow for the train speeds and the wagon carry weights to be increased to rated capacity. Another key focus is the completion of the signals and communications systems. Currently the rail program is operating on a manual signals system which is less than optimal. Once the automated system is in place, scheduled for end August, the overall program will achieve full efficiency.
Mine construction was assessed at 92% as at end May. The focus of work during the month was 1) wet commissioning of the Ore Processing Facility (OPF), 2) completion of back filling the three product vaults and 3) completion of the automated train loader.
During May approximately 500,000 t of product was processed thought the OPF as ramp up commences. The first load of OPF product hit the stockpile floor in May as prior to this date product was being supplied by mobile plant that will continue to supplement overall tonnage through the commissioning process. The focus going forward will be to complete the desand plant which accounts for approximately 7% of the overall value of works for the mine site. The use of the desand plant is to wash out the sections of the rocket fines material that is screened into ultra fines and that houses an excess of alumina. Currently the mine plan is not producing any high alumina rocket material and accordingly the plant is not required until later in 2008.
