Fortescue Metals Group’s (FMG) board has given the green light to the development of the Eliwana iron ore mine and rail project in Western Australia’s Pilbara region. The project is expected to be valued at approximately $1.69 billion (US$1.275 billion).
The project will involve the construction of a 143-kilometre rail as well as a new 30 million tonne per annum (Mtpa) dry ore processing facility and infrastructure.
Eliwana is expected to support FMG’s premium 60 per cent iron grade product - also known as Fortescue Premium - which is set to be introduced in the second half of 2019 financial year.
The Eliwana iron ore project is expected to create up to 1,900 jobs during its construction and approximately 500 full-time jobs once it is operational. FMG is expecting to begin production at Eliwana by December 2020.
According to FMG Chief Executive Officer Elizabeth Gaines, the Eliwana development will help maintain the company’s low-cost status.
“The 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.
“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,” Ms Gaines said.
The Eliwana project is going to be delivered over a three-year period, with capital expenditure as follows:
- FY19 - US$165 million
- FY20 - US$760 million
- FY21 - US$350 million
This development is going to be financed from FMG’s operating cash flows at a US$42 per tonne capital intensity.
A definitive feasibility study report (DFS) on the project has been completed and detailed design is set to go underway. FMG is also working on getting two public environmental reviews and a mining proposal approved.
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