PERTH (miningweekly.com) – Iron-ore miner Fortescue Metals on Thursday increased its resource estimate for the Solomon project, in Western Australia, by 160-million tons.

The project now has a total measured resource of 108-million tons, an indicated resource of 750-million tons and a total resource portfolio, which increased from 2,7-billion tons to 2,86-billion tons.

Fortescue said in a statement that the resource upgrade further developed the Solomon stage-one feasibility study for a major mining operation within the Solomon Hub.

In May, Fortescue CEO Andrew Forrest suspended A$15-billion worth of expansion expenditure on news that the federal government would impose a 40% tax on resources profits.

One of the projects affected was the 160-million tons a year Solomon Hub project, which would cost $9-billion to develop.

This project has been four years in development, Forrest said, and includes the development of a new Pilbara port at Anketell point.

To develop Solomon Hub, Fortescue had planned to establish a debt funded capital platform using equity derived from the cash flow from the company’s Chichester Hub. However, this financing plan was severely impacted as a result of the tax impost.

Despite the risk associated with the super profits tax, Fortescue made the decision to continue the feasibility study on the Solomon Hub project, which included the recent exploration work and resource upgrade.

Although the recent announcement by Prime Minister Julia Gillard to scrap the super profits tax in favour of a mineral resources rent tax has been welcomed, Forrest has been hesitant to say whether the A$15-billion investment would be resumed.

Executive director Russell Scrimshaw on Thursday told reporters that the company has made no decision yet on when to restart these projects.

“We are still sufficiently concerned as to the uncertainty of the final structure of the proposed tax that we have not yet taken a firm decision on the projects on hold. When we do have sufficient clarity around the tax, we will inform the market of our decision at that point,” Scrimshaw said.

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