Overview of operations

As one of the world’s largest producers of iron ore, Fortescue’s wholly owned and integrated operations in the Pilbara include the Chichester, Solomon and Western mining hubs. Our mining infrastructure is connected to the five berth Herb Elliott Port and Judith Street Harbour towage facility in Port Hedland via the fastest heavy haul railway in the world.

 

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Chichester Hub 

Our Chichester Hub in the Chichester Ranges, comprising the Cloudbreak and Christmas Creek mines, has an annual production capacity of approximately 100mtpa from three Ore Processing Facilities (OPFs).

Consistent and sustained performance delivered from the OPFs has allowed us to optimise our product strategy through enhanced blending and beneficiation, supporting iron grades and reducing impurities. This has contributed to lower mining cut-off grades, as we optimise ore bodies with sustainably lower strip ratios.

To further enhance our ore, the Christmas Creek OPF infrastructure has been upgraded to include a Wet High Intensity Magnetic Separator (WHIMS) to recover high grade iron from the finer ore fed through the plants, helping to improve product yield and reduce total mining volumes.

Cloudbreak utilises relocatable conveyors which can be moved, lengthened or shortened once an area is mined. The conveyors now cover 10km, extended from the initial 5km length due to the success and efficiency of this innovative infrastructure. Construction is underway to extend the conveyor by a further 10km.

 

Solomon Hub

The Solomon Hub in the Hamersley Ranges is located 60km north of Tom Price and 120km to the west of our Chichester Hub. It comprises the Firetail, Kings Valley and Queens Valley mines which together have a production capacity of 75mtpa.

The expansion to Queens Valley will help maintain production of the Kings Fines product. Solomon represents a valuable source of production by blending higher iron grade, low cost Firetail ore with low phosphorous Chichester ore to create Fortescue Blend.

 

Western Hub 

Fortescue is developing the Western Hub, which includes significant amounts of high iron content bedded iron ore and is now home to the Eliwana mine.

Located 140km to the west of Solomon, the Eliwana mine spans over 50km and commenced operations in December 2020. The operation includes 143km of rail linking to the Hamersley rail line and a 30mtpa dry OPF.

Together with Eliwana’s innovative low profile designed OPF and dual stacker reclaimer, Eliwana has the capacity to direct load onto trains up to 9,000 tonnes per hour.

Eliwana is now producing at an annualised run rate of 30mtpa, contributing to Fortescue’s low cost status and providing greater flexibility to capitalise on market dynamics.

 

Hedland Operations 

Fortescue wholly owns and operates our purpose designed rail and port facilities, constructed to deliver iron ore from our mines to Port Hedland for shipment to our customers.

Covering 760km of track, our railway is the fastest and heaviest haul line in the world.

The efficient design and layout, optimal berthing configuration and ongoing innovation to increase productivity make Fortescue’s Herb Elliott Port the most efficient bulk port operation in Australia.

The port has five operating berths and our current infrastructure is capable of safely and efficiently exporting in excess of 180mtpa.

Fortescue has been granted approval to increase the licensed throughput capacity of Herb Elliott Port from 175mtpa to 210mtpa, in line with our strategy to deliver growth through investment in significant projects including the Iron Bridge Magnetite Project.

The Judith Street Harbour towage infrastructure and our fleet of tugs provide safe and reliable towage services that maximise the efficiency of our operations, while offering competitive third party towage services within the port.

Designed to complement our port infrastructure, the fleet of eight 260,000 tonne capacity Fortescue Ore Carriers deliver approximately 11 per cent of our shipping requirements, while improving load rates and efficiencies and reducing operating costs. Our shipping fleet completes our mine to market supply chain.

 

Iron Bridge Magnetite Project 

The US$3.3 – US$3.5 billion Iron Bridge Magnetite Project is under development and will deliver 22mtpa of high grade 67% Fe magnetite concentrate product, further enhancing the range of products available to our customers.

Iron Bridge, located 145km south of Port Hedland and incorporating the world class North Star and Glacier Valley Magnetite ore bodies, is an unincorporated joint venture between Fortescue’s subsidiary FMG Iron Bridge and Formosa Steel IB.

The innovative process design, including the use of a dry crushing and grinding circuit, will deliver globally competitive capital intensity and operating costs.

The Iron Bridge project includes the installation of a 135km concentrate slurry pipeline to Port Hedland, together with a return water pipeline.

In FY21, Fortescue completed a 12-week technical and commercial assessment of the project to validate the capital cost and schedule, with first production scheduled by December 2022 and a ramp up period of 12 to 18 months.

The construction of a module offload facility at Lumsden Point in Port Hedland commenced in FY21 to address logistical constraints relating to the delivery of large modules fabricated offshore.

 

Sales and marketing

Fortescue has an integrated operating and marketing strategy, focused on meeting the needs of our customers while maximising value. Fortescue products are sold to a global customer base, with the majority of tonnes sold to long-term customers in China.

In 2019, we established our wholly owned Chinese sales entity FMG Trading Shanghai, a portside sales capability to supply our products directly to Chinese steel mills from regional ports.

This capability is now well established and has allowed us to enhance our service to small and medium-sized customers through direct supply in Renminbi, complementing our existing contractual seaborne arrangements.

 

World leading technology 

Fortescue was the first company in the world to deploy Caterpillar (CAT) autonomous haulage on a commercial scale when trucks fitted with autonomous haulage system (AHS) technology began operating at the Solomon Hub in 2012.

Today, our AHS fleet is among the largest in the world and demonstrates our unique capability to manage and operate a multi-class truck size autonomous haulage site.

In FY21, we celebrated the milestone of surpassing two billion tonnes of material moved. When our Train Control Centre opened in 2009, we were the first operation in WA to control a railway from outside the region.

Now known as the Fortescue Hive, the expanded, purpose-built remote operations facility was opened in 2020 and includes our planning, operations and mine control teams, together with port, rail, shipping and marketing teams.

The Hive allows team members across our complete supply chain to work together, 24 hours a day, seven days a week, to deliver improved safety, reliability, efficiency and commercial outcomes. It underpins our future use of technology, including artificial intelligence and robotics, and will evolve to include the generation and integrated distribution network for Pilbara Energy Connect (PEC).

 

 

Energy infrastructure

Since October 2019, Fortescue and our partners have announced investments in excess of US$800 million in significant energy infrastructure projects which will increase our use of renewable energy, a key contributor to our pathway to achieve our emissions reduction targets.

PEC, together with the Chichester Solar Gas Hybrid Project, will deliver 25 per cent of our stationary energy requirements from solar power.

PEC leverages existing assets and provides Fortescue with a hybrid solar gas energy solution that enables the delivery of stable, low cost power and supports the incorporation of additional large-scale renewable energy in the future.

At 30 June 2021, over 660 of the 800 foundations for transmission poles for Stage 1 were completed, 500 poles stood and 150km of transmission line installed.

The new infrastructure builds on our previous energy initiatives, including the construction of the Fortescue River Gas Pipeline and the conversion of the Solomon Power Station from diesel to gas generation.

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Exploration 

Fortescue began as an exploration company and today our iron ore tenements remain key to maintaining mine life and sustaining product quality in our core iron ore business.

Our exploration activities in the Western Hub, Solomon Hub and Eastern Hamersley are focused on adding high iron content, dry, low cost tonnes to our product suite, providing further optionality for the business.

Study work is progressing at Nyidinghu and in FY21 we acquired a strategic tenement adjacent to our Mindy South iron ore tenement package in the Pilbara.

Recent Australian exploration activity has been primarily focused on early stage target generation for copper-gold in the Paterson, Rudall and Goldfields regions in Western Australia. Additional exploration activity is underway in New South Wales and South Australia, including through the farm-in and joint venture agreement with Tasman Resources in South Australia.

 

International footprint 

We recognise that early stage exploration can unlock significant value. Our world class exploration capability is driving future growth as we target global opportunities and commodities that support decarbonisation and electrification of the transport sector.

Fortescue has a well-established presence in South America. In Ecuador we have concessions prospective for copper in exploration phase covering 135,000 hectares (ha) and in Argentina we currently hold 323,000ha of tenements, prospective for copper-gold.

We are also assessing exploration and development opportunities in Peru, Chile and Brazil, as well as Portugal and Kazakhstan.

Fortescue has a 19 per cent stake in TSX listed Candente Copper Corporation. Our focus is on advancing the Canariaco project in Peru.

 

Fortescue Future Industries

Our 100 per cent renewable green energy and industry company, FFI, is establishing a global portfolio of renewable green hydrogen and green ammonia operations that will position it at the forefront of the global renewable hydrogen industry.

FFI will leverage our world-leading track record of innovation and development of large-scale integrated infrastructure assets to deliver the vision of green hydrogen becoming the most globally traded seaborne energy commodity in the world.

FFI will be a key enabler of our industry-leading target to achieve carbon neutrality by 2030, investing in decarbonisation technologies to remove the use of fossil fuels across our Pilbara operations, including stationary power, buses, trucks, drill rigs, locomotives and ships.

Through the development of green electricity, green hydrogen, green ammonia and other industrial projects, FFI will provide the technology, solutions and capability for heavy industry around the world to commercially adopt other energy sources and carbon-free fuels.

For more information on FFI, visit http://www.ffi.com.au