FMG takes control of Solomon Hub processing facilities

FORTESCUE Metals Group has taken control of processing and train load-out facilities at the Solomon Hub, while extending other works under the previous Leighton Contractors agreement.
FMG takes control of Solomon Hub processing facilities FMG takes control of Solomon Hub processing facilities FMG takes control of Solomon Hub processing facilities FMG takes control of Solomon Hub processing facilities FMG takes control of Solomon Hub processing facilities

The Castle Camp at Solomon

Andrew Duffy

Under the revised contract, Leighton will transfer operational responsibility for the two Solomon Hub ore-processing and train load-out facilities to FMG.

A six-month extension increasing the scope of other minor works will also be granted to Leighton.

FMG said the total contract value would remain similar to the original award. Leighton said last year that the total value of work under the Solomon Hub agreement was $A2.8 billion.

FMG said the transition would enable it to manage all OPFs across its operation and allow it to optimise its product portfolio at 155 million tonnes per annum.

It follows previous moves to take control of the Christmas Creek OPFs.

FMG said in January that the Christmas Creek transition would help reduce debt and ensure a “cultural alignment” in its staff.

The move came after contractor Kurt Williams was killed in a crushing incident last August and Allen Zuvela died in an incident at a heavy-vehicle workshop in late December.

After the deaths FMG CEO Nev Power said efforts needed to be made to ensure the company’s safety culture was embedded in its contracting partners’ workforces.

Power said the company had worked with Leighton through the ramp-up of the Solomon Hub to achieve the planned 60Mtpa run rate during March.

He said the two companies would continue working together.

“Through our strong relationship with Leighton Contractors, we have ramped up the Solomon Hub to achieve a 60Mtpa run rate in a little over 12 months,” he said.

“This is a strategic business decision that recognises ore processing expertise as a core Fortescue skill across the business.”

FMG shares were last trading 1.2% higher at $5.38, while Leighton Holdings was down 0.5% to $20.77.