Australia’s third largest iron ore producer Fortescue Metals Group, is about to sign an engineering agreement with a Chinese company to help boost its iron ore production at its Chinchester Hub.
The Chinchester operations in Western Australia would be suitably benefited when the deal with the China Gezhouba Group Company or CGGC comes through.
In the Chichester Range project sites, Fortescue has estimated a reserve of 1.6 billion tonnes (Bt) from the total resource of 2.2Bt, which includes 143 million tonnes (Mt) of proved and 1.48Bt of probable reserves, as classified under the JORC code. Fortescue's first mine site, Cloudbreak, commenced production in May 2008 and Christmas Creek came on line in April 2009.
According to a company statement from Fortescue the two will negotiate and define an engineering and procurement role for CGGC and then convert it to a formal appointment if mutually accepted terms are agreed upon.
Fortescue has shelved $17 billion worth of expansion projects in its Solomon and Western Hubs in Western Australia last month. This was in response to the federal government’s proposed RSPT mining tax. It now hope t o increase the output from the Chincester Hub which comprises the Cloudbreak and Christmas Creek mines.