09/12/2020 - 10:30

Fortescue begins Eliwana mining

09/12/2020 - 10:30

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Fortescue Metals Group has officially opened its Eliwana iron ore mine in the Pilbara, in the same week the commodity’s price reached a new high of $US146 per tonne.

Elizabeth Gaines says ore produced from Eliwana provides flexibility across Fortescue's product mix. Photo: Gabriel Oliveira

Fortescue Metals Group has officially opened its Eliwana iron ore mine in the Pilbara, in the same week the commodity’s price reached a new high of $US146 per tonne.

The Eliwana mine-and-rail project has the capacity to produce 30 million tonnes of ore per annum and could raise Fortescue’s average product grade to above 60 per cent iron.

Chief executive Elizabeth Gaines said the new mine would maintain Fortescue’s low-cost status and provide more flexibility across its product mix.

“Fortescue has a vision to drive economic growth and contribute to thriving local communities, and our investment in the Eliwana mine-and-rail project will continue our strong track record of delivering against this goal,” she said.

Fortescue awarded 290 contracts worth a combined $1.83 billion to Western Australian businesses for works on Eliwana, Ms Gaines said, while local procurement totalled 84 per cent of project spending.

About 2,000 jobs were created during construction.

Mines and Petroleum Minister Bill Johnston said Eliwana provided a significant boost to WA's post-COVID-19 recovery and buoyant iron ore industry.

The Eliwana mine would create 500 on-site jobs, he said.

The iron ore sector is WA's biggest mining employer, providing jobs for more than half of the state's 107,000 mining workforce.

Opening of the Eliwana mine comes at a good time for Fortescue, with the iron ore price reaching a new record of $US146/t.

Ore produced from Eliwana will be trained to Port Hedland, where Fortescue earlier this year received environmental approval to raise its export capacity from 175mtpa to 210mtpa.

Fortescue currently has the capacity to produce 188mtpa of hematite ore per annum. That's set to increase by 22mtpa next year with the opening of Fortescue's Iron Bridge magnetite mine.

Iron Bridge is a 50:50 joint venture between Fortescue subsidiary FMG Iron Bridge and China’s Formosa Steel, set to deliver high-grade 67 per cent iron magnetite each year.

Production is planned for the first half of calendar 2022.

Fortescue is the largest listed WA-based resouces company by revenue, according to Business News Data & Insights.

The Andrew Forrest-chaired business generated $18.8 billion in revenue in the past financial year, accounting for more than a third of revenue between the state's top 20 resources companies.

Fortescue was trading 1 per cent higher at 1:27pm AEDT, to $21.71.

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