Andrew Forrest’s iron bet makes the grade
For Andrew Forrest, the sight of some magnetite concentrate traversing a conveyor belt in Port Hedland represented ‘the single biggest relief’ of his career.
For Fortescue Metals Group chairman Andrew Forrest, the sight of some magnetite concentrate traversing a conveyor belt in Port Hedland on Monday represented “the single biggest relief” of his career.
The company’s multi-billion-dollar bet on magnetite – the lower-grade form of iron ore that has historically proved a minefield for every mining company that has tried to exploit it – culminated in the first few tonnes of cowpat-like concentrate making its way to Fortescue’s stockpiles at the port.
Most promisingly for Fortescue, the maiden concentrate had a grade of 68.17 per cent iron: comfortably above the project’s designed 67 per cent grade target. Most magnetite mines, Dr Forrest says, take years before they can reach their grade target. Some never make it there.
The early milestone is a sign that Iron Bridge, for all its headaches, may avoid the full range of issues that plague the sector.
“There is no-one in the magnetite industry who has said ‘aren’t we glad we did that project, let’s break out the champagne’. They’ve all had various levels of difficulty-slash-disaster,” Forrest said.
But Fortescue is now starting to toy with the idea of doing more Iron Bridges, buoyed by one promising early indicator from those first few tonnes.
Dr Forrest described 68 per cent magnetite as the “mecca” of magnetite and the highest grade material to come out of the Pilbara.
If Fortescue can maintain that sort of grade, the product should become increasingly sought after by steel mills looking to reduce their carbon footprint by feeding in higher-grade material.
Mining magnetite ore can itself be an emissions-intensive process, but Fortescue is well advanced with plans to run the mine off a combination of solar, wind, batteries and hydrogen.
Powering Iron Bridge with clean energy, Fortescue chief executive Fiona Hicks says, will help the company grow the price premium for the mine’s concentrate and improve its bottom line.
“The quicker we decarbonise Iron Bridge, the more money we save,” she said.
The first concentrate production is also an important step in repairing the reputational damage from the earlier dramas in the project’s history.
Fortescue experienced a huge management clean-out in February 2020 after Dr Forrest – who had turned his focus to his hydrogen and philanthropy ambitions – discovered the project’s cost and schedule had blown out.
Dr Forrest was no stranger to difficult start-ups. But the investment in Iron Bridge was the company’s single biggest investment and crucial to Dr Forrest’s ambitions to build a cleaner iron ore miner.
Originally tipped to cost $US2.6bn and deliver first output in mid-2022, Fortescue now says the total cost will be about $US3.9bn. Dr Forrest, however, is adamant that the blowout is much less than it could have been.
“From where we started, it’s been a remarkable recovery,” he says.
Dr Forrest also believes the painful lessons from Iron Bridge will aid the company in its big bet on hydrogen.
The reporter travelled to Iron Bridge as a guest of Fortescue.