PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has again revised the capital cost estimate for its Iron Bridge magnetite mine, in the Pilbara, while first production has been pushed out until December 2022.

The miner in February announced that a review into the Iron Bridge operation had upwardly revised the capital cost of the project from $2.6-billion to $3-billion, with first production now expected in the second half of 2022, as opposed to the first half.

Fortescue on Friday told shareholders that a technical and commercial assessment of the project had increased the capital cost estimate to between $3.3-billion and $3.5-billion, subject to joint venture (JV) approval, with the company’s share of the cost to be between $2.5-billion and $2.7-billion.

The miner said that the increase in capital expenditure compared to the investment decision in early 2019 reflected project-specific and market factors impacting materials and installation costs, including inflation, foreign currency exchange rates and labour constraints.

The assessment reviewed Iron Bridge’s operating cost structure to ensure alignment with market conditions, confirming life-of-mine C1 costs of between $33/t and $38/t, inclusive of fees to Fortescue for port and power services.

First production from Iron Bridge is now expected in December 2022, with ramp-up to full production to take place in 12 to 18 months.

“Iron Bridge represents a strategic investment with compelling returns for Fortescue and the JV. It further enhances our range of products through our integrated operations and marketing strategy and increases our overall production and shipping capacity to meet strong demand from customers,” said CEO Elizabeth Gaines on Friday.

“The iron-ore market fundamentals support the investment in the Iron Bridge project, and we anticipate strong demand for this high value-in-use product, which will attract a premium to the Platts 65% Fe CFR Index.

“Led by our highly experienced project team, completion of the technical and commercial assessment of the Iron Bridge project has confirmed the optimal transportation solution, while also addressing contractor and logistical constraints, managing capital costs and confirming first production by December 2022.

“Underpinned by Fortescue’s unparalleled track record and capability in safely developing and operating major iron-ore projects, Iron Bridge is well positioned to meet market demand and deliver strong returns for the Joint Venture and our stakeholders,” Gaines said.

The project is expected to produce 22-million tonnes a year of high-grade 67% iron magnetite concentrate, with a mineral resource of 5.4-billion tonnes and an ore reserve of 716-million tonnes.

The Iron Bridge project’s initial cost blow-out saw the resignation of COO Greg Lilleyman, director of projects Don Hyma, and director of Iron Bridge, Mani McDonald.