Fortescue Metals Group is moving forward with development of the Queens Valley mining area in the Pilbara after receiving the environmental and heritage approvals it requires.
The Queens Valley development, which holds an estimated value of $US287 million ($416.9 million), is within Fortescue’s Solomon Hub operations.
It will be used to produce Fortescue’s low-alumina King Fines iron ore in accordance with the company’s strategy of achieving higher margins through the optimisation of product mixes for its Asian customers.
Fortescue achieved a record low direct cost of $US12.36 per wet metric tonne in 2018, a price it continues to maintain in the 2019 financial year.
Around 15 kilometres from the company’s Kings ore processing facility, Queens Valley is planned for operational launch in the 2022 financial year with an estimated mine life of 10 to 15 years.
The project will involve the construction of a hydraulic barrier wall and relocation of Solomon’s mobile maintenance facilities to maximise efficiencies.
Fortecue’s speciality at Solomon Hub (which has a production capacity of 70 million tonnes a year) is the blending of higher grade, low-cost Firetail ore with low phosphorous Chichester ore to create a distinct product.
“Fortescue’s integrated operations and marketing strategy defines a product portfolio that maximises value from the Fortescue orebodies over the long term, ensuring the continued delivery of returns to shareholders,” Fortescue chief executive officer Elizabeth Gaines said.
“The Queens mining area development will maintain our highly valued Kings Fines low-alumina sinter fines product which supplies Fortescue’s key customers in China as well as in Japan and Korea.”