Name and Location
Iron Bridge iron-ore project, Australia.

Client
The FMG Iron Bridge Joint Venture (JV), which comprises Fortescue Metals Group (88%) and a subsidiary of China’s Shanghai Boasteel Group Corporation (12%).

Project Description
The Iron Bridge project, located about 100 km south of Port Hedland, in Western Australia, encompasses the world-class North star and Glacier Valley iron-ore deposits, which have a combined iron-ore resource of 5.2-billion tonnes.

The project will be implemented in stages.

Stage 1 is expected to produce 1.5-million tonnes of 66% iron hematite and Stage 2 has an estimated capacity of 9.5-million tonnes of 68% iron magnetite concentrate.

Value
Stage 1 will cost $340-million.

Duration
Stage 1 production is expected early in 2015. Stage 2 development is subject to JV approval, with construction expected to start in 2015.

Latest Developments
Formosa Plastics Group has announced a $1.15-billion investment in the FMG Iron Bridge JV.

Under the agreement, Formosa, through its subsidiary Formosa Steel IB, will acquire a 31% unincorporated JV interest in the FMG Iron Bridge JV for $123-million.

Formosa will fund the first $527-million of capital expenditure on the FMG Iron Bridge project development. This funding covers the construction of Stage 1, which will start after the completion of the transaction at an estimated cost of $340-million.

Formosa will also participate in Stage 2 of the project, subject to receipt of relevant government approvals and JV sanction. If approved, Stage 2 will be funded by the balance of Formosa’s initial funding and a contribution of the next $1.05-billion from FMG Iron Bridge, which will be followed by proportional contributions – Formosa 31% and FMG Iron Bridge 69%.

In addition, Formosa will buy up to three-million tonnes of iron-ore a year at market prices to supply the Formosa Ha Tinh steel mill when commissioned.

The company will also prepay The Pilbara Infrastructure $500-million upfront to access Fortescue’s port facilities at the Herb Elliott port under separate infrastructure access agreements.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Fortescue Metals Group media contact Yvonne Ball, tel +61 417 937 904 or email yball@fmgl.com.au.