Fortescue’s Eliwana iron ore gets the go ahead

Fortescue Metals Group has approved the development of the Eliwana mine and rail project, located in Western Australia’s Pilbara region. Highlights

• Estimated capital cost of $1.275 billion
• 143 km of rail, a new 30 Mt/y dry ore processing facility (OPF) and infrastructure
• Production commences December 2020 with a life of mine strip ratio of 1.1
• Underpins the introduction of a 60% Fe grade product (Fortescue Premium) in the second half of FY19
• Financed from operating cashflows at a capital intensity of $42/t.

Fortescue’s Chief Executive Officer, 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 Mt/y production rate over 20 years.

“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.

“Fortescue has now shipped over one billion tonnes of iron ore in just ten years, generating strong returns from our position at the lowest end of the global cost curve. This project is important to Fortescue and the state of Western Australia, creating up to 1,900 jobs during construction, 500 full time site positions once operational and the continued flow of benefits to our communities and the state economy.”

The Eliwana Project will build on Fortescue’s development and construction capability, utilising the latest technology, autonomous trucks and design efficiency while redeploying existing assets to this world leading development. Capital expenditure is expected to be incurred as follows:

FY19 – $165 million
FY20 – $760 million
FY21 – $350 million

A DFS has been completed with detailed design about to commence. The approvals process is under way for two public environmental reviews and a mining proposal.

Fortescue’s annual integrated reserve and resource report is scheduled for release in August 2018 and will include the updated reserve and resource position at Eliwana.