Fortescue approves $1.7 billion Eliwana development

Fortescue Metals Group has given development of the Eliwana iron ore mine and rail project in the Pilbara in Western Australia the green light.

The $US1.275 billion ($1.69 billion) project involves 143km of rail, a new 30Mt/y dry ore processing facility and infrastructure. It is expected to create 1900 construction jobs and 500 full-time positions once operations have started.

Fortescue hopes to launch production at Eliwana in December 2020. The proposed mine will support the introduction of Fortescue’s premium 60 per cent iron grade product in the second half of the 2019 financial year.

Chief executive officer Elizabeth Gaines said development of the Eliwana project would maintain the miner’s low-cost status.

Gaines explained Eliwana would provide Fortescue “with greater flexibility to capitalise on market dynamics while maintaining a minimum 170Mt per annum production rate over 20 years.”

“The project allows us to commence the supply of Fortescue Premium product to the market from existing operations in the second half of FY19 with volumes increased as Eliwana ramps up to full production,” Gaines said.

Fortescue expects the Eliwana project will build on the company’s development and construction capability, using the latest technology, autonomous trucks and design efficiency, while redeploying existing assets to the development.

The development costs will be split over the next three financial years, with $US165 million in 2019, $US760 million in 2020, and $US350 million in 2021. Eliwana will be financed from Fortescue’s operating cash flows at a capital intensity of $US42/t.

“The project is important to Fortescue and the state of Western Australia, creating up to 1900 jobs during construction, 500 full-time site positions once operational and the continued flow of benefits to our communities and the state economy,” Gaines said.

Fortescue has completed a definitive feasibility study for the project and is about to launch the detailed design phase. It is also seeking two environmental approvals and one for a mining proposal.

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