|FMG pushes 175|
|Wednesday, 4 December 2013Thomas Smith|
FORTESCUE Metals Group has set its sights on lifting production to 175 million tonnes per annum of iron ore.
The company is in the final stages of ramping up to the target of 155Mtpa by March next year.
That aim moved a step closer after FMG this week announced it had achieved first production from its 40Mtpa Kings mine in Western Australia’s Pilbara region.
Speaking during a tour of the Solomon mine, CEO Nev Power said the company intended to “sweat” its assets to squeeze additional capacity from its existing infrastructure.
But with construction set to begin on the AP5 berth at Port Hedland, Power believes FMG has the capacity to produce a further 20Mtpa once the Solomon hub is at full production.
“I think we can drive an extra 20 million tonnes. It really depends on the market,” he said.
“Our first strategy is to drive what we've got as hard as we can, to sweat those assets and get the maximum amount out of them.”
FMG’s climb above and beyond the long-established target of 155Mtpa is already well underway.
The Firetail mine at Solomon opened in May, with production rates running 5Mtpa above the expected rate of 20Mtpa.
The Kings mine shipped first ore in November and is expected to produce 40Mtpa.
But during a tour of Solomon’s mine and rail operations, it’s clear that FMG and Nev Power are examining how they can increase production capacity from existing operations.
Power said the company was exploring ways of processing detrital ore sitting above the main deposit – something that in the past would have been dumped.
High in impurities, the ore would be sold at a discount rate but still deliver profit that would contribute to the long-term profitability of the mine.
FMG’s strategy is on achieving value for money.
Having invested heavily in mine, rail and port infrastructure, the company is focused on financial health.
Debt reduction and fiscal consolidation, coupled with maximum production rates, will be the focus for 2014.
First production from the 40Mtpa ore processing facility at Solomon’s Kings mine was a major step for the company.
“The construction of the Kings OPF was carried out in record time and with an excellent safety record,” Power said.
“Our ramp-up to 40Mtpa over the next few months will lift our overall production to 155Mtpa and consolidate our position as one of the world’s largest producers of iron ore.”
Solomon’s low strip ratios make it the company’s lowest cost operation, helping reduce overall operating costs.
Production at Solomon’s Kings and Firetail mines has led to the creation of products. The Firetail and Chichester mines have been blended to create the Fortescue Blend.
“Kings [channel iron deposits] ore represents a new, stand-alone product for Fortescue to provide a wide range of product options to more than 50 customers across Asia,” FMG said in a statement.
Power added: “Innovation and creativity led to Fortescue’s discovery of Solomon in 2005 and it has continued during construction and now operations.”
Shares in FMG were last trading 1.1% higher at $A5.53.
Click here to read the rest of today's news stories.