Mining billionaire Andrew Forrest’s troubled foray into producing high-grade ore – Fortescue’s Iron Bridge project – has suffered another setback, with a leaking water pipeline that could more than halve magnetite production this financial year.
However, the lost production and $220 million cost to replace 65 kilometres of pipeline will hardly dent Fortescue’s financial performance. The miner shipped 48.5 million tonnes of its main iron ore product haematite in the December quarter, 6 per cent higher than the previous three months to achieve its second-highest first-half production.
At Iron Bridge, Fortescue had planned to produce five million tonnes of magnetite this financial year as it ramped up the $5.9 billion project to its full capacity of 22 million tonnes a year. That forecast has now been cut to two to four million tonnes due to continual leaks in the higher pressure section of a 240 kilometre-long pipeline that supplies water to the processing plant.
Fortescue’s first move into complex processing of the ore it mines has been dogged with problems since three senior executives exited three years ago when news of cost blowouts first surfaced.
Fortescue’s guidance for total production of both types of iron ore for the 12 months to June remains unchanged at 192 million to 197 million tonnes.
Fortescue Metals chief executive Dino Otranto said it was a strong quarter from the iron ore operation that included its second shipment of magnetite and the initial export from its Belinga project in Gabon.
“We achieved this while continuing to grow our green technology, energy and metals businesses, keeping costs low and maintaining our safety performance,” he said.
Fortescue aims for its mining operation to be emissions-free by 2030, a far more aggressive target than any other Australian miner. It is trialling the first of three electric excavators powered by a trailing cable more than two kilometres long.
Fortescue’s energy division, led by chief executive Mark Hutchinson, is prioritising for board approval green hydrogen projects in Brazil, Kenya and Norway.
Fortescue shares were up 1.8 per cent to $28.90 each in early trading on Thursday.
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Source: Thanks smh.com