Fortescue production down, but plenty of upside
Mark Mentiplay, 20th Apr 2012
PERTH, Apr 20 – Despite a fall in iron ore production and shipping in the latest quarter, Fortescue Metals Group remains on track to increase production from its Western Australian Pilbara operations to 155Mtpa in 2013/14.
It is also considering options to bring its 2Bt Nyidinghu resource on stream at 30-45Mtpa in the first half of 2015.
In the meantime, some bad weather, including a couple of cyclones that closed the Port Hedland export hub and some scheduled maintenance shutdowns, saw mined ore down 15% on the December 2011 quarter to 13.6Mt and total shipped ore, including about 520,00t for others, down 15% to 12.6Mt. However, these numbers were, not surprisingly, up 41% and 50% respectively on the March quarter a year ago.
The company expects to catch up on the delayed shipments through the current quarter and deliver 15.8Mt for the June 2012 quarter.
Total direct costs rose to $A50.91/t in the March 2012 quarter, up from $44.98/t in the previous quarter.
On the development front, the $US1.1B Christmas Creek Phase-2 Expansion and Chichester Hub projects are expected to see first flows through the new ore processing facility (OPF) in September this year, with the ramp up to a combined Christmas Creek total run rate of 50Mtpa planned for the December quarter 2012.
First ore through the new 20Mtpa Firetail ore processing facility, part of the $US2.7B, 60Mtpa Solomon project, is targeted for the December 2012 quarter with the 40Mtpa Kings OPF coming on stream in the March 2013 quarter to align with the fourth berth completion.
The $US2.4B, 155Mtpa Port-55 program, spanning three key phases, is expected to see the first phase completion of the recently commissioned third berth and the second outloading circuit ramping up through the June 2012 quarter.
Phase-2 covers the second inload circuit, which includes the train unloader and stacker, and is on schedule for completion at the end of September 2012. Phase-3 covers the third unloader, third stacker, reclaimer and shiploader, the fourth berth and additional housing/accommodation now reforecast to be completed within the March 2013 quarter
Fortescue is also currently in the midst of updating its Pilbara-wide iron ore resource base and potential development pathways, within its three hubs and two ports strategy, which includes new port developments options at Anketell and outer harbour opportunities at Port Hedland.
At Nyidinghu, the company is considering options for the development of projects utilising the 2Bt resource to provide increased production volumes that will blend well with the low-phosphorous tonnes at Cloudbreak and Christmas Creek. The study is reviewing a schedule that could enable Fortescue to start mining at Nyidinghu in the first half of 2015, the primary focus being a 30Mtpa-45Mtpa mine development there.
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