Fortescue Metals Group has vowed at the official opening of its final expansion project that it was not the end of its incredible rise to become the world’s fourth-largest iron ore producer.
Fortescue Metals Group has vowed at the official opening of its final expansion project that it was not the end of its incredible rise to become the world’s fourth-largest iron ore producer.
FMG opened its 40 million tonne per annum Kings Valley project at its Solomon Hub today, with a ceremony attended by about 400 people including more than 140 key Asian customers.
The completion of Kings Valley lifts FMG's production capacity to 155mtpa, a long-held production goal for the world's fourth-largest iron ore miner.
Chairman and founder Andrew Forrest said the opening of Kings Valley marked the end of its US$9.2 billion expansion of its Pilbara operations and was one of the most important milestones in Fortescue’s history.
“We announced a major expansion of our port, rail and mining operations in November 2010 and set ourselves the ambitious target of completing the projects by June 2014,” Mr Forrest said.
“Today we are celebrating an extraordinary achievement.”
Chief executive Nev Power said FMG had completed the production upgrade at a record speed.
“The pace of production achieved here at Solomon and particularly at Kings is unprecedented in global mining history,” Mr Power said.
“(We) have achieved in months what has taken others a decade to complete.”
Mr Power said FMG would now focus on consolidating its production at 155mtpa, lowering costs and rapidly paying down its debt.
He declined to name a new iron ore production target, instead saying it would continue to explore for new projects and seek to boost its existing mine capacity.
“We will be anything but boring as we go forward, it’s a very exciting time for the company,” Mr Power said.
“We are continually exploring in the Pilbara and a lot of the exploration is occurring in our mining hubs like here in the Solomon to extend the mine life and to provide incremental opportunities as we go forward.
“We then have more than 85,000 square kilometres here in the Pilbara that are relatively unexplored or underexplored, which we’ll be looking for the next priority of projects in iron ore.”
Mr Forrest said FMG remained committed to making new discoveries in the Pilbara.
“I think we’re one of the world’s most successful exploration companies. That’s not going to stop,” Mr Forrest said.
“We’re so excited about the fact that one of the most massive mineral regions in the world is one of the most unexplored regions in the world and that is the Pilbara.
“You can count on us continuing to get out there and making big discoveries.”
Mr Power said FMG was not concerned by short-term iron ore price volatility being driven by stocking cycles.
“We see iron ore prices continuing to trade in the range of $110 to $130 a tonne (until the end of the year),” Mr Power said.
He also said Roy Hill’s expected entry into the market would not detract from FMG’s ability to export from Port Hedland or maintain its competitiveness.
“Today the capacity at the port, we estimate, is somewhere north of 600 tonnes, well above the allocated capacity of 495 million tonnes.
“Of course any new supply that comes into the iron ore market is technically a competitor, but there is a lot of capacity in the iron ore market to absorb those additional tonnes and by the time they’re in the market, the market will have grown by more than the new tonnes that are coming in anyway.”
