Eliwana, Iron Bridge to maintain Fortescue’s low-cost status

Fortescue's Iron Bridge magnetite project.

Fortescue Metals Group is aiming to set itself apart from other major Australian iron ore producers with its integrated product strategy, targeting higher grade material.

Chief operating officer Greg Lilleyman outlined this approach at IMARC 2020, highlighting the company’s plan to complete infrastructure blending at Port Hedland.

By doing so, Fortescue will be able to blend premium, high-grade iron product with lower-grade ores across its product range, maximising value for the company.

Fortescue will do so by combining products from across its Western Australian iron ore portfolio, including the Eliwana and Iron Bridge mines, which are edging closer to being operational.

“Iron Bridge will deliver a premium magnetite concentrate product with iron content of 67 per cent iron, and importantly, very low levels of alumina and phosphorus content,” Lilleyman said.

“The beauty of our integrated operations and marketing strategy and integrated infrastructure at Port Hedland means we can, if we choose, blend premium product at any point across production, giving us ultimate flexibility that positions us to meet all market segments and adjust our mix to maximise value.”

The company began the enhanced product strategy in 2018 to position itself in a leading position for three product segments, when it introduced West Pilbara Fines in December 2018.

Now, the company is on track to load its first train at the Eliwana mine and rail track before the end of the 2020 calendar year.

At Iron Bridge, Fortescue has completed more than 85 per cent of engineering work, over 80 per cent of civil earthworks and has recently poured first concrete for its 200 million tonne per annum ore processing facility.

The projects will see Fortescue continue its reign as the lowest cost major iron ore producer.

During the September quarter of 2020, its C1 costs were an impressive $US12.74 ($17.30) per wet metric tonne, 2 per cent lower than September 2019.

“Fortescue’s approach to innovation is demonstrated by our low-cost journey,” Lilleyman said.

“Over the past nine years from a high of $US48 per wet metric tonne back in financial year 2012 to below $US13 per wet metric tonne today, innovation of productivity has played a significant role in that cost journey.

“Eliwana will see us maintain Fortescue’s low-cost status and provider greater flexibility to capitalise on market dynamics.”

Lilleyman reflected on his position as being the only major iron ore company chief operating officer to have accountability for an entire value chain, from new mine development through to shipping, sales and marketing.

“It gives Fortescue a unique advantage to truly optimise this value chain through one team in one office, rather than different people spread across the globe each with accountability for one step in the value chain,” he said.

“I cannot overstate the value of having this truly integrated approach, ensuring customer needs are always front and centre with operational, mine planning and for product quality decisions being made.”

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