Fortescue Metals pins hopes on upgrade
Source: PERTH AAP
Date: 2005-Oct-07 05:28 PM
Iron ore developer Fortescue Metals Group Ltd hopes the latest resource upgrade at its $1.95 billion Pilbara project will silence concerns about the quality and amount of iron ore at the project.
Fortescue has increased the amount of resources in the indicated category by 70 per cent at the Cloud Break and Christmas Creek to 1.4 billion tonnes of iron ore.
Most of the increase came from the Cloud Break deposit, where 572 million tonnes is now considered indicated.
Total resources at the project, including indicated and the lower confidence category inferred, now total 2.4 billion tonnes.
Executive director Graham Rowley said he hoped the new resource statement would silence critics which had doubted the resources at the project.
“We have been criticised a little bit of late with people saying `FMG has only got inferred resources’ and we kept saying `we have got good resources’,” he said.
“We are now talking about on the record a very large orebody which we have always claimed to have. It is very exciting to affirm our own beliefs in ourselves.”
The massive infrastructure and mining project is due for completion in 2007, initially producing 45 million tonnes of ore a year.
The resource upgrade also boosted the high-grade iron ore, which can be directly shipped without any beneficiary processing, by 80 per cent to 578 million tonnes.
Fortescue has planned to initially direct ship this ore for five years but Mr Rowley said he hoped to double that to ten years.
Drilling will continue with further upgrades expected at Christmas Creek and Cloud Break over the next two months.
Another point of contention with critics of the Pilbara project is the offtake agreements the company has with Chinese and Japanese steel mills.
“We still have the same level of contracts and memorandums of intent we have previously reported,” Mr Rowley said.
“We are continuing to hold discussions with steel mills.”
He said the recent agreement between Hancock Prospecting and Rio Tinto to develop the Hope Downs iron ore project in Western Australia had increased interest in Fortescue’s own project.