Fortescue says it is still committed to its iron ore mine in Gabon
Touted as a ‘remarkable’ project that would be the envy of its peers, sources close to Fortescue’s iron ore mine in Gabon say staff have been stood down. So other than a token first shipment, what’s happening at the $320m project?
Fortescue has moved to allay fears its iron ore project in Gabon is in trouble despite appearing to have made little progress since celebrating a first shipment from the African nation more than a year ago.
Hailed as a project that would “open growth opportunities” for Andrew Forrest-led Fortescue throughout Africa, sources close to the project suggest the mine hasa strained relationship with Gabon’s military rulers and stood down contractors and slowed exploration activity in the lead up to Christmas.
Fortescue said in response that there would be fluctuations in job numbers as it looked to advance the project in Gabon, where General Brice Oligui Nguema seized power in August 2023.
General Nguema led a coup against then president Ali Bongo Ondimba, whose family had ruled for 55 years and shown a willingness to work with Fortescue.
What is Fortescue doing in Gabon?
“Fortescue remains fully committed to the Belinga iron ore project and the long-term benefits a large-scale development will bring to Gabon,” a Fortescue spokesperson said.
“Our discussions with the Gabon government remain positive and we continue to work together to advance a potential large-scale development.
“The project is still in an early stage of development, with an immediate focus on exploration and studies.
“As a result, in the short term there will be an ebb and flow in job numbers as we move through various stages, finish our initial main camp construction, and allow time for studies to be completed.
“We remain focused on prioritising the employment of a local workforce and will explore ways to upskill and redeploy staff to other areas of the business where possible.
“In line with Fortescue’s commitment to create a positive impact in the areas in which we operate, we will continue to engage with, and support, local communities.”
How big is the Belinga iron ore project
Fortescue did not respond to questions about whether exploration work had come to halt, or how many employees it had on the ground in Gabon.
More than 600 Gabonese, including contractors, have been employed on the project at various times, including some 200 from local villages.
Fortescue had also purchased more than $US30m in goods and services from businesses in Gabon.
Fortescue owns as 72 per cent stake in Ivindo Iron, the entity that operates the Belinga project. The remainder of Ivindo is held by Abu Dhabi’s Africa Transformation and Industrialization Fund and the Gabon government.
How much has Fortescue invested in Gabon
Perth-headquartered Fortescue earmarked $US200m for early-stage mining development at Belinga in 2023-24.
It has not provided guidance on capital expenditure at Belinga in 2024-25 after shifting focus to exploration and study work.
Fortescue has flagged expenditure of $US300m-$US400m across the group on various exploration projects and studies in 2024-25, with any spending on Belinga likely to come from this pool.
Julie Shuttleworth, one of Dr Forrest’s most trusted lieutenants at Fortescue for more than a decade, was running the project before she left the company in June last year.
Has the site produced any iron ore?
In an update provided at the end of September, Fortescue said exploration work continued and to that point over 70,000 metres of reverse circulation drilling and 10,000 meters of diamond core drilling had been completed.
Sources said Fortescue was finding the going tougher in Gabon under military rule after making rapid progress with Belinga under the former president.
The December 2023 shipment came just 10 months after Fortescue signed a mining convention with then Gabonese government.
The immaterial volume of iron ore on board was sourced from a small operation at Belinga, a potential high-grade deposit in Gabon’s northeast that has been subject to extensive studies and was once on BHP’s radar.
Fortescue metals division chief executive Dino Otranto hailed the shipment as a remarkable achievement at the time.
“This project has the potential to revolutionise our portfolio and ultimately create a product that will be the envy of our peers. It will also open growth opportunities for Fortescue throughout Africa,” he said.
Gabon handed an operating permit covering Belinga to the China Machinery Engineering Corporation as far back as 2006, but later suspended the permit after a falling out between the parties.
