Fortescue to cooperate with CGGC for Chichester Hub expansion project

Monday, 21 June 2010 12:23:02 (GMT+2)

Australian iron ore miner Fortescue Metals Group Ltd (Fortescue) has announced that on June 21 it will sign a cooperation agreement with the Chinese engineering group China Gezhouba Group Company (CGGC) pursuant to Fortescue's expansion planning for 95 million mt per annum of capacity within its Chichester Hub.

According to the Fortescue press release, the agreement commits both parties to negotiate and define an engineering and procurement role for CGGC, which would convert to a formal appointment, if mutually acceptable terms can be agreed.

Fortescue is currently well progressed in the implementation of its capital works program to increase production to 55 mt per annum from the Chichester Hub and completion of these works is expected within the March quarter of 2011.

The expansion will proceed despite the Australian government's proposed Resource Super Profits Tax, as it is intended to implement the works program prior to the commencement of the tax in 2012. The project will be financed through internal cash flow and the CGGC agreement is subject to Fortescue board approval.

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