World Biz
Fortescue opens Firetail mine, confident in Chinese market
Last Updated: 2013-05-06 12:36 | Xinhua
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Australian iron ore innovator, Fortescue Metals Group Ltd (FMG) has taken another step toward becoming Asia's leading supplier by announcing the official opening of the Firetail iron ore mine at Solomon Monday.

One of the most significant milestones in its ten-year history, FMG's 60 metric ton per annum (mtpa) Solomon mine is a major component of the company's ambitious expansion to 155 mtpa by the end of this calendar year.

Australian Mines and Petroleum Minister Bill Marmion joined Fortescue chairman Andrew Forrest and chief executive Nev Power at Solomon, 60 km north of Tom Price, to formally open the first stage of the 3.2-billion-U.S. dollar development.

Firetail will produce 20 mtpa of iron ore while the second stage of the development, the Kings mine, will produce another 40 mtpa.

"This represents a valuable source of new production from long- life, low-cost mining operations that allow us to blend with Chichester ores to create an enhanced product for our customers - the new Fortescue Blend," said Power.

The company began commissioning the Firetail ore processing facility last month and production is expected to ramp up quickly, increasing Fortescue's capacity to 115 mtpa.

Mining at Firetail has been under way since late last year, with ancillary inpit crushing used to produce ore and commissioning feed for the processing and train load-out facilities.

Among many milestones over the last decade, Fortescue has placed quiet emphasis on the potential of the Firetail mine since the first train carrying ore on the new Fortescue Hamersley Line rolled out in December 2012.

Fortescue has also shown deep faith in the China story despite a volatile spot price and a wavering confidence in Australian commentators over the last 12 months.

Andrew Forrest told Xinhua that China had made the right decision to ensure confidence and growth.

"In everything I do, I look first at the people - what's motivating the people; what kind of people they are. I've been fortunate enough to meet with your China leadership and I have met with people who I believe in: empathetic, strong, intelligent, though humble, very focused on their people and the interests of their people - my personal view is that China is in good hands," he said.

Fortescue's net realized iron ore price for the last quarter was 131 Australian dollars a ton, off an index price of 148 a ton.

Power said that the price would remain strong into the near- term.

"It's probably going to trade in that range of 120 dollars to 130 dollars a ton for the foreseeable future, but we will have some fluctuations around that. And in the short term, I see this sort of price level at 139 dollars, 140 dollars a tonne continuing because there are very low iron ore stocks."

Power, speaking earlier this week, also showed FMG's confidence in the market.

"I've got to say that China looks very strong going forward and we've got renewed confidence in the continued industrialization and urbanization growth in China, and therefore, steel demand and iron ore demand."

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