FMG Expansion Project, Western Australia

Operator: Fortescue Metals

Location:  Pilbara

Cost:  $360m

Timeframe:  18 months, operational by mid 2013

Employment: Unknown, but expected to be in excess of 600

Status:  The existing integrated mine, rail and port supply chain was constructed in less than two years and Fortescue's board has recently approved an US$8.4 billion expansion to their Pilbara operations.  Expansions plans are on schedule for completion in mid 2013.

Operations

• Cloudbreak, the flagship mine is located approximately 260 kilometres from Port Hedland.
• Christmas Creek is 50 kilometres to the east of Cloudbreak
• Cloudbreak is a 40 million tonne per annum mining operation, Christmas Creek is currently operating at approximately 18 million tonnes per annum.
• The 40 tonne axle load railway is the heaviest haul in the world with up to seven trains a day transport iron ore from the mines to Herb Elliott Port in Port Hedland
• The port was designed with expansion in mind, to allow construction to take place without interfering with daily operations

Development

• Fortescue is undergoing a transformative expansion from a 55 million tonne per annum operation to a 155 million tonne per annum powerhouse by June 2013.
• The 155mtpa expansion involves additional infrastructure at Herb Elliott Port, 120 kilometres of mainline rail duplication, a new 130 kilometre rail spur from Solomon to the mainline, a 60mtpa mine at Solomon and Chichester Hub development to take its combined production capacity to 90 million tonnes per annum (plus 5mtpa from a 50/50 BC Iron Joint Venture).
• The Solomon Project is 120 kilometres to the west of the Chichester Hub, more than 3 billion tonnes have been discovered here and early ore is expected later this year, with full production on target for July 2013.
• Solomon is the largest iron ore start-up in Australia, showcasing innovation to execute in record time and at a lower capital cost/tonne ration than any of our competitors
• A maiden resource of 625 million tonnes has been declared at the Western Hub. This figure is expected to grow and both Nyidinghu and Western Hub will rival the Chichester Hub in production capacity.
• Fortescue is investigating a ‘two port, three hub’ strategy that would take production to 355 million tonnes per annum which could potentially include a new Pilbara port.

Awarded Contracts and Employment Opportunities include:

• Decmil; will construct a 200 person rail camp, including accommodation rooms and associated facilities, at the site south of Port Hedland as part of Fortescue Metals Group’s T155 Rail  Expansion Program.  Construction is due to commence in early March 2012, with a forecast completion date of second quarter of calendar year 2012.
• Worley Parsons
• RCR Tomlinson
• AGC
• Construction Industries Australia
• Brierty
• Leighton Contractors; received formal notification as preferred contractor for Fortescue Metals mining and operations at the Solomon iron ore project.  Leighton Contractors and Fortescue have reached agreement within a limited notice to proceed (LNP) to facilitate the continuation of negotiations regarding the five-year mining and operations contract. The LNP also provides for pre-mobilisation activities and early services for the project, including works for operational readiness and full mine management. A decision by Fortescue on contract award is expected sometime in June 2012.
• Transfield Services; awarded a one‐year $35 million contract in July 2012 to design and construct diesel storage facilities and distribution infrastructure to support the development and operations of the Solomon Mine in the Pilbara. The site is strategically located near railway and road infrastructure 30 minutes from Port Hedland and is critical to Fortescue’s expansion plans in the region.
• Leighton Contractors; awarded a $1.5b full service contract at the Firetail iron ore site which will generate around 600 mining jobs. Leighton will be operational in September 2012, with the contract expected to run for five years, with a two year extension option.  More details here.
• Eastern Guruma and Wirlu-murra Yindijibarndi Aborirginal Corporation (WMYAC) JV: the joint venture will undertake mining services work in partnership with Leighton Contractors over five (from February 2013) years at Fortescue Metals Group's Solomon mine in the Pilbara.  In February 2013, WMYAC will also begin a six month earthworks package at Fortescue's Kings deposit in partnership with a major mining contractor, starting mid-year after the contractor is selected.  More details here.