Fortescue iron ore plans fall into place with Chinese contract

<p>Prospective iron ore exporter Fortescue Metals Group has got the all clear to start work on its new Pilbara iron ore development after the signing of a long-term contract with a Chinese steel mill.</p> <p>The unidentified mill has signed a 20-year deal to take 10m tonnes of iron ore a year from the development, and has agreed to pay $120m in customer capital needed to lock in all other funding for the project.</p> <p>The new contract also means that 100% of Fortescue’s planned output is now committed under memorandums of intent, according to the group.</p> <p>The Fortescue development will include a mine and processing plant, and part ownership of the Pilbara Infrastructure Fund, which will develop an independent port and railway facility in the Pilbara region in Western Australia.</p> <p>The fund’s facilities will be used to transport and ship iron ore for Fortescue and other small operators in the region.</p> <p>Fortescue is the new venture of mining identity Andrew Forrest, who is the former chief executive of Anaconda Nickel.</p> <p>When he first revealed his plans for the Fortescue project last year, Mr Forrest said the mine, rail and port development would aim to provide for independent operators that have been largely pushed out of the Pilbara region.</p> <p>BHP Billiton and Rio Tinto dominate iron ore mining and shipping in the Pilbara, and generally do not allow other operators access to their transport infrastructure.</p> <p>Now with the Fortescue project moving an important step forward and the Hope Downs mine and railway project in the works, the two giants could face greater competition in the next few years.</p> <br />