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| HOME >> Topics List >> November, 2008 >> 28 (Fri) |
| FMG Completes Port Capacity Upgrades |
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Australian Fortescue Metals Group (FMG) announced November 26 that it has concluded the port shut down. The first vessel following the shut docked at the Herb Elliott Port November 25 and loading has commenced. The primary purpose of the port shut was to extend the ship loader rail and conveying system to enable it to service both berths and this has been successfully completed. The only outstanding work in the commissioning of the second berth for active loading is to complete the last berthing pylon. This will be done over the next few weeks without disruption to the shipping program. The completion of the twin berth loading system is part of the optimization program required to take FMG's infrastructure capacity from the current 45 million tonnes per annum (Mt/a) to the targeted 55 Mt/a. The target for mining over the 2008 calendar remains at around 20 Mt with volumes progressively ramping up in line with FMG's production schedule. With loading now recommenced FMG is better able to assess shipping tonnages for the remainder of the calendar year. The revised target range is 15 - 16 Mt which is considered most satisfactory given the shipping time lost due to the Expansion Shut Down which was required to accommodate the mine ramp up. It is only four months since Project Completion was achieved and FMG is still in its commissioning year. The completion of the port expansion shut down will provide for a strong ramp-up position going into 2009. The mining program will also be boosted by the incorporation of the de-sand plant to assist in reducing the alumina content of mined ore from sections of the Cloudbreak deposit. Work is progressing on preparation for commissioning of the plant which is scheduled to start in early December. The recent tightening of demand in China has resulted in a far more discerning market for product impurities which in turn has resulted in much greater selectivity for low alumina mining. As noted in the November 10 release, this has been a cause of the slower ramp up within FMG's processing operations. In the context of marketing, FMG confirms that not only the quantity but also the quality of its iron ore continues to be well received in China. All 70 shipments made to date have been accepted by its customers without any quality penalties as its ore is within the contracted specifications. The production ramp up to 55 Mt/a will also be assisted by the commissioning of the lump circuit scheduled for early 2009. The current market conditions that favor lower alumina, fines only production, have lessened the urgency to bring the lump circuit into production. However going forward, the current benchmark record pricing premium of 39% for lump over fines product is expected to narrow as part of the 2009 benchmark price settings. Accordingly, the demand for lump is expected to return to more normal conditions for the second quarter of 2009 which is the period that FMG plans to be at the run rate of 55 Mt/a. In the meantime it has been learned that FMG has suspended construction work of the Cloudbreak to Christmas Creek rail ine (47% completed). |
| last modified : Wed 03 Dec, 2008 [10:17] |
