Fortescue reveals plans for US$9 billion expansion

Friday, 12 March 2010 11:58:01 (GMT+2)

On March 12, Australia's third biggest iron ore producer Fortescue Metals Group Ltd (Fortescue) revealed plans for the development of the Solomon resource that could cost up to US$8.9 billion.

The Perth-based company said during a presentation to stakeholders that the aim is an expansion of 60 million mt in the first stage and 100 million mt in the second stage, costing $US3.24 billion and $US5.7 billion respectively. The project in the iron ore-rich Pilbara region of Western Australia includes the construction of a new railroad and port.

According to the presentation, the company's iron ore operations in the Chichester Ranges produces 40 million mt iron ore a year and are expected to reach 55 million mt within 12 months and with further expansion to 95 million mt.

The company has a "medium term" production target of 355 million mt a year.

Analysts remain skeptical about how Fortescue will fund its expansion drive, international press reports said.

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