The project, known as Solomon is expected to cost around US$3,34bn.
Within the next two years Western Australia’s big new iron ore miner Fortescue Metals Group Ltd (ASX: FMG) will decide whether it will open up a new iron ore mining area in the Pilbara of Western Australia.
The project known as Solomon was detailed at the Sydney Mining Club and was said to have a development cost of A$3.6 billion (US$3.34 billion).
Fortescue launched its operations through the Cloudbreak mine in the Chichester Range to export to China through a port developed by the company at Anderson Point in Port Hedland. The company has started development on its second mine, Christmas Creek, also in the Chichester Range.
Solomon is well west of Cloudbreak. It was indicated the company’s capacity out of Port Hedland may cater only for ore from the Chichester hub, so a second port and new rail link would be required to a Pilbara port at Anketell Point – particularly if Fortescue ramps up beyond 155 million tonnes per annum of export ore.
The cost of developing Solomon would take in A$850 million (US$790.8 million) for the mine, a similar amount for the railway, and A$700 million (US$651.3 million) for processing plant
The company claimed that while a lot more drilling was required the Solomon hub had potential to be much larger than the Chichester Ranges operations, currently mining at a rate of 38 Mtpa and gearing to increase to 95 Mtpa.
The Solomon mine could begin at 60 Mtpa, expanding to 100 Mtpa.
While Cloudbreak and Christmas Creek are bedded iron formations, not mined elsewhere in the Pilbara at this stage, Solomon has a mix in its iron ore geology and includes what is known as channel iron deposits.
Sydney Mining Club delegates were told that exploration in the Pilbara in the past five years has yielded reserves and resources for Fortescue of 6.3 billion tonnes, including reserves of 1.6 billion tonnes. The discovery cost was put at A2cents a tonne.
Fortescue dominates the landholdings for iron ore in the Pilbara with 17,400 square kilometres, compared to Rio Tinto with 11,000 sq km and BHP Billiton 6,500 sq km.
Fortescue’s holdings include a large number of coastal and offshore tenements, assumedly for ironsands shed over the eons. The company also holds coastal and offshore tenements in New Zealand for ironsands.
Source : www.mineweb.co.za
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