PILBARA-focussed iron ore major Fortescue Metals Group has secured access to almost US$965 million through a syndicated finance facility to help fund its production expansion to 155 million tonnes per annum, estimated to cost US$8.4 billion.
The $ facility will remain untouched initially and will be progressively drawn upon during the next 24 months to subsidise mining fleet acquisitions. Fortescue chief financial officer Stephen Pearce said there had been strong support from Australian and international finance institutions for the company’s facility, which was secured less than two months after Fortescue raised US$2 billion in senior unsecured notes.
Fortescue aims to triple its existing iron ore output to 155mtpa by the end of the 2013-2014 financial year.
The expansion will see iron ore production rise to 90mtpa at the Chichester Hub and continued development of the Solomon Hub project, which has a projected 60mtpa output.
To support production growth, Fortescue has planned a rail expansion, the T155 rail infrastructure project, which involves duplicating 120km of rail line from Port Hedland and constructing a 130km spur to the Solomon Hub.
Fortescue is also constructing new facilities at Herb Elliott Port to increase its iron ore export capability to 120mtpa.
The company is currently reviewing other options to augment the port’s capacity to 155mtpa.
Civil infrastructure and building contractor Decmil Australia has managed to gain a slice of Fortescue’s funding after securing a new contract and a contract variation totalling $137 million with the iron ore player.
Decmil will assist Fortescue in developing the T155 rail infrastructure project and, under the contract variation, will receive $40 million in return for constructing additional accommodation at a Fortescue rail camp.
Under the contract, Decmil will construct a new rail car workshop, amenities building and administration centre.
The contract also requires Decmil to modify an existing workshop, co-ordinate the fit-out of a new rail car workshop, and design and construct a locomotive provisioning building and rail operations office.