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Iron Ore Information
Fortescue Metals Group Company information.
Fortescue Metals Group is an Australian mining company set
to become a major exporter of iron ore. The company has large holdings
in the Pilbara region of Western Australia. The company is listed as FMG
on the Australian Securities Exchange and has shown spectacular
share appreciation in the last few years. Fortescue Metals is led by
entrepreneur and currently Australia's richest man, with a total wealth
over $9 BN due to the increasing share price over the last 5 years,
Andrew Forrest. Forrest also founded Anaconda Nickel now Minara
Resources, one of the world's largest nickel miners.
Core Business
Fortescue Metals Group reached a milestone in May 2008 by loading its
first iron ore shipment bound for China. Fortescue have at least 10
Chinese steel mill contracts lasting for around 10 years. Baosteel was
the first company to receive their iron ore. Fortescue Metals Group
is the operator of the mine in Cloud Break. Fortescue also holds major
deposits at Mount Nicholas, Christmas Creek, Solomon and Tongolo.
Infrastructure
The company has built a mine, a railway and a new port at Point Anderson
(aka Herb Elliott port) near Port Hedland. The railway is a heavy duty
standard gauge one, with 204 wagons 32,640T trains up to 2.5km long
carrying 27,500T of ore at 40T axleload. (The weight of the two 4000HP
engines is extra.) The railway is open access (infrastructure) which
means that other mines will be able to use it for a fee.
Railway
The Fortescue Railway parallels another iron ore railway for over 100 km. Fortescue sought access to use this
line, but BHP declined. The National Competition Council recommended
Fortescue should be granted access, but then Treasurer Peter Costello
refused the NCC recommendation. However, Fotescue appealed this to the
Australian Competition Council. In parallel BHP Billiton is seeking to
overturn the original NCC decision in the High Court. Railway access
would significantly help Fortescue's development and expansion oftheir
40,000 sq km owned area if access is allowed. The Fortescue has a
flyover over the Mt Newman Railway, and a crossing of the BHP Billiton
railway. The new trains on the Fortescue Railway are fitted with
Electronically Controlled Pneumatic brakes for greater performance.
The Fortescue trains are amongst the Heaviest trains in the
World.
The "First Ore On Ship" occurred in May 2008, although ballasting of the
railway and installation of the final signalling system had yet to be
completed.
Shipment
The first shipment of ore took place in May 2008, 3.5 years after
construction started. A second shipment of ore was scheduled to arrive
in China on the 8th of June 2008.
Significant increases in shipments of iron ore from Fortescue's Cloud
Break mine are expected over 2008. The initial shipment has been hailed
as a strong sign that Fortescue will become an increasingly important
force in the iron ore market. Talks on increases in ore prices have
bolstered this position as competitor Rio Tinto secured a deal that
effectively increased ore prices by 95%. Fortescue has announced that it
would use Rio Tinto's benchmark iron ore price for the time being.