Fortescue Metals Group (ASX: FMG) will expand production to 155Mtpa from 55Mtpa, after the board approved a major US$8.4 billion of works and procurement expansion program to commence at the company's Chichester and Solomon Hubs.
There will be three main work projects.
A budget of US$4.6 billion has been allocated to port and rail, with expansion of the existing port, train unloader and the main line rail network, including construction of the new rail line to the Solomon mining area.
US$2.3bn is for the Solomon Mining Hub, with greenfield development of Solomon Stage 1 covering two mining operations at Firetail and Kings, together with related infrastructure.
US$1.5bn is for the Chichester Mining Hub, a brownfield development of the existing Chichester mines to lift total production to 90Mtpa across the Cloudbreak and Christmas Creek mining operations.
The company said funding will be through one or more new bank or bond debt facilities,
cash on hand and cash flow from operations.
Peter Meurs, development director, said “To achieve the expansion timetable, Fortescue will spend capital of US$8.4bn over a planned 30 months, which at the peak of construction will equate to approximately US$26m per day."
Fortescue’s Board approved the expansion plans after assessing the recently completed Solomon Stage 1 feasibility study, and a full review of the detailed planning for the Chichester Hub expansion.