• FMG produces first concentrate at Iron Bridge magnetite mine
  • Iron ore exports flat year on year in March quarter with financial year record of 190Mt or above in sight
  • Construction complete at FFI’s electrolyser plant in Gladstone


Fortescue Metals Group’s (ASX:FMG) has hit a major milestone at its Iron Bridge project near Port Hedland following myriad cost upgrades and schedule changes over the past few years.

On Friday it finally delivered the US$3.9 billion high grade iron ore mine producing its first wet concentrate from its processing facility for pumping to Port Hedland, where it will be stored packaged and exported to Asian steel mills.

The project is a major step for FMG, which, with its blue skies green hydrogen business, is keen on tapping into a high grade iron ore market it’s previously been the furthest away from of the iron ore majors.

The 22Mtpa project, 69% owned by FMG and 31% by Formosa Steel, will produce a concentrate of 67% Fe grade and above, enabling FMG to sell a product that can be blended with lower grade iron ore to reduce emissions in the blast furnace, attract a premium over the prevailing 62% Platts IODEX and supply green DRI steelmaking plants.

“On the Iron Bridge Magnetite Project, I am pleased to report that the first wet concentrate was produced on Friday. The team is very focused on the safe commissioning and production ramp up,” new FMG CEO Fiona Hick said.

“This is a significant milestone for Fortescue as Iron Bridge represents our entry into the highest grade segment of the iron ore market, providing an enhanced product range while also increasing production and shipping capacity.

“It demonstrates our strong track record of successfully delivering complex projects safely.”

It came as FMG delivered a robust first quarter from its conventional DSO iron ore business in the Pilbara.

Andrew Forrest’s Fortescue shipped 46.3Mt of iron ore, down 6% on the quarter but virtually flat year on year after exporting 46.5Mt in the third quarter of FY22.

Costs were up 3% on the quarter and 12% on the year to US$17.73/wmt, in line with other iron ore majors like BHP (ASX:BHP) and Rio Tinto (ASX:RIO) who have been hit by inflationary pressure.

However, FMG says costs will end up at the lower end of its guidance range of US$18-18.75/t.


Record on track

It means FMG will need to ship a similar amount in the final quarter of the financial year to beat last year’s record of 189Mt, with record year-to-date shipments of 143.1Mt placing the company well to exit FY2023 within its 187-192Mt guidance.

Like its peers, FMG will be spared major disruptions this month after Tropical Cyclone Isla missed port infrastructure in Port Hedland.

It sold its product, mostly lower grade iron ore, for average revenue of US$108.57/dmt in the March quarter, realising 87% of the Platts 62% Fe CFR Index of US$125.50/dmt.

Strong Chinese iron ore prices, which have pulled back in recent days to US$105/t as China’s NRDC began a regulatory crackdown, were backed by crude steel production of 262Mt for the March quarter, up 6% on the same period in 2022.

Meanwhile FMG is also moving forward with major growth projects at the Belinga iron ore project in Gabon and in its Fortescue Future Industries green energy arm, where it has committed US$500-600m of opex and US$230m of capex for FY23.

Construction works have been completed at an electrolyser manufacturing plant at Gladstone in Queensland with fit out to begin soon. Also, the company has completed location scoping and is starting a zoning plan process for a proposed 300MW green hydrogen and ammonia facility in Norway at Holmaneset, and FFI signed an investment support and implementation agreement with the Kenyan Government for a similar facility.

FFI CEO Mark Hutchinson has previously flagged that five projects could be taken to a final investment decision by the iron ore giant’s green energy arm this year.

“Also reinforcing our commitment to investing in growth is the progress underway at the Belinga Iron Ore Project in Gabon. The Mining Convention was signed during the quarter, establishing the legal, fiscal and regulatory regimes for the Project, including an early stage mine development,” Hick said.

“Fortescue continues to advance its decarbonisation plan as we work towards eliminating emissions from our iron ore operations by 2030.

“Together with our strong balance sheet and focus on investing in growth, we are well placed to advance our transition to a global green metals and energy company and ensure all stakeholders continue to benefit from Fortescue’s success.”



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