Fortescue's Solomon iron ore expansion back on track as spot prices rebound
Australian pure iron ore player Fortescue Metals (ASX:FMG) will recommence expansion of the Kings deposit at the Solomon mine hub in January following recent improvements to iron ore prices.
Fairfax reports that the company delayed expansions at the Kings deposit in Western Australia's mineral rich Pilbara in September due to declines in iron ore prices.
Following a rebound in price levels and brightening market prospects, Fortescue's Nev power says the Kings expansion will be completed before the end of 2013:
The recent improvement in iron ore prices and market outlook, along with a number of measures undertaken by Fortescue, including the sale of non-core assets, a reduction in operating costs and the restructuring of existing bank facilities, underpinned the decision to complete Kings in the new year.
The expansion will raise iron ore output at Kings by 40 million tonnes per annum, for a total production target of 155mtpa by December 2013.
Iron ore prices are expected to hit USD$140 per tonne early in 2013 as demand from China revives. Spot prices plunged in 2012, hitting lows of around USD$86 per tonne due to ailing growth in the Middle Kingdom.
Fortescue shares have received a boost from the decision, gaining 2.44% in Thursday morning trading to hit AUD$4.45 per share.