Fortescue Metals Group has confirmed it will build a new large-scale iron ore mine in the Pilbara region of Western Australia, as part of its plans to increase the average grade of its iron ore output.
The Australian mining giant will spend US$1.27 billion on the construction of the Eliwana mine, which will replace the almost depleted Firetail mine in the same region.
First ore from Eliwana has been earmarked to arrive before the end of 2020, with spending on the project set to begin in the next financial year, before the biggest outlay in fiscal 2020. Around 1,900 jobs will be created during construction according to Fortescue.
“Development of the Eliwana project will maintain Fortescue’s low-cost status, providing us with greater flexibility to capitalise on market dynamics while maintaining a minimum 170 million tonnes per annum production rate over 20 years,” said chief executive Elizabeth Gaines.
Fortescue currently produces several iron content products between 56% and 59%, but is planning to introduce a new ‘premium’ product of 60% iron content next year. The Eliwana project is central to these plans.
Fellow Australian majors BHP and Rio Tinto are also planning to approve multi-billion dollar projects before the end of the year, forming part of a development blitz in Western Australia’s iron ore epicentre.