Fortescue to decide on $3.6 billion iron ore mine

Fortescue will soon decide on the construction of its Solomon Mine project.

Fortescue Metals Group will decide in 2010/2011 whether it will develop its Solomon iron project, at a cost of $3.6 billion.

If Fortescue decides to proceed on what it has called its ‘next generation’ project, Solomon will become its third mine. It is positive about the Solomon mine as it has the potential to be larger than the it’s existing Chichester Ranges mine, where it has a current output of approximately 38 million tonnes per year with an expectation to increase production to 95 million tonnes per annum. The projected output for Solomon will begin at 60 million tonnes per year, ramping up to 100 million tonnes. Fortescue is aiming to identify a four billion tonne resource, an increase from its total current Joint Ore Resource Committee (JORC) reserve of 2.2 billion tonnes, with an indicated resource of 522 million tonnes.

The total $3.6 billion development cost is broken down into $1.2 billion for port and loading facilities, as well as $850 million for rail infrastructure connecting the mine to existing rail lines to Port Hedland. Fortescue is looking at a further $850 million to fully develop the mine, with an additional cost of $700 million for a processing plant.

The Solomon operation is located in the Hammersley Rangers, west of Fortescue’s Cloudbreak and Christmas Creek mines.

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