Fortescue reviews cost of Pilbara magnetite project
FORTESCUE Metals Group has confirmed the total cost of its massive Pilbara magnetite project is “undergoing a detailed review” as the cash continues to roll in from bumper iron ore prices.
Fortescue, whose CEO is Elizabeth Gaines, said it received an average $US121.84 a tonne for its product in the December quarter, the highest average price for its iron ore since the same quarter in 2014.
The company has already flagged after-tax profits of about $US4bn ($5.24bn) for the first half of the financial year, and said it shipped a record 90.7 million tonnes of ore in the last six months of 2020, after December quarter shipments of 46.4 million tonnes – in line with the same period in 2019.
Fortescue also confirmed that it is struggling to control costs at its Iron Bridge magnetite mine, originally tipped to cost $US2.6bn, but which sources say could now cost up to 25 per cent more.
Iron Bridge includes an ore processing facility capable of producing 22 million tonnes of concentrate a year, an airstrip and accommodation camp, as well as a 135km pipeline to Port Hedland to pump magnetite slurry to its port facilities, and return water to the mine, as well as another 195km pipeline to source water from borefields in the Canning Basin.
Fortescue did not release an estimate of the potential blowout, but confirmed it is under pressure from the high Australian dollar, and rising operational costs in Western Australia, as coronavirus restrictions make it more difficult to access skilled labour.
Ms Gaines said the iron ore mine had hit key milestones on both production and its major projects in the December period.