The review of the Iron Bridge project increased the estimated capital cost of the project to $3bn from the previous $2.6bn
Fortescue Metals has delayed the first production from its Iron Bridge magnetite project, located in the Pilbara region of Western Australia, to the second half of 2022.
The iron-ore miner has completed a detailed review of the Iron Bridge project, which increased the estimated capital cost of the project to $3bn from the previous $2.6bn.
Fortescue said that the review focused on capital estimate and project schedule was based on strength of the Australian dollar, access to resources and other market factors.
Fortescue chief executive officer Elizabeth Gaines said: “The newly appointed Iron Bridge project team will draw on all of Fortescue’s DNA, world class expertise and our Values as we challenge ourselves through innovative thinking and capital discipline.
“The team will assess the pathway to underpin our revised forecast capital estimate, as well as the identification and mitigation of execution and scheduling risks through a comprehensive review of the project.
“Iron Bridge represents a strategic investment which enables Fortescue to deliver a full portfolio of products to the market, generating growth in earnings and cashflow, and resulting in enhanced returns for our shareholders and Joint Venture partners through all market cycles.”
The technical and commercial assessment at the project is currently underway, and is anticipated to complete in 12 weeks.
The assessment would primarily focus on magnetite concentrate transportation solution and return water pipelines to Port Hedland, enhanced utilisation of the company’s port and rail infrastructure, along with contractor strategy.
Fortescue said that limited works to be conducted during the next 12 weeks include engineering, off site fabrication, procurement activities and site based civil works.
The Iron Bridge project is expected to deliver production capacity of 22mtpa of a 67% Fe content, a low impurity concentrate suitable for pellet feed or blending with sinter fines, said the company.
It is being developed in two phases by an unincorporated joint venture (UJV) between FMG Magnetite with 69% interest and Formosa Steel IB with 31% stake.
The joint venture partners are responsible for their individual equity share of the total capital expenditure required for the project.
The JV has incurred a capital expenditure of around $1.1bn as of 31 January 2021, since the Stage 2 investment decision in April 2019.
Fortescue’s share of Stage 2 investment amounts to nearly $750m, and has also contributed $274m of deferred joint venture contributions relating to Stage 1 of the project.