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Fortescue to respond to claims of doubts on project

<p>The Fortescue Metals Group said it will respond to articles in this morning’s <em>Australian Financial Review</em> (Thursday, March 24) claiming that the Chinese backers of its Pilbara iron ore project might not be as solidly supportive as the group has suggested.</p> <p>The company will issue a statement through the Australian Stock Exchange later today.</p> <p>The <em>AFR</em> reported that Fortescue’s Chinese construction partners are not prepared to build and finance the project under the present arrangements.</p> <p>The China Metallurgical Construction Group told the paper it was concerned that Fortescue has not proved that the ore reserves are of sufficient quality and large enough to support plant capable of processing 45m tonnes of iron ore a year over an initial 20 years.</p> <p>The Chinese firm claimed it was not legally committed to building a port, processing facility and railway line from Port Hedland to the mine site in the Chichester Ranges.</p> <p>Fortescue had planned to start construction on the project in the second quarter of this year once it had obtained commitments from overseas clients to take the miner’s production. </p> <p>Fortescue announced yesterday a substantial increase to its iron ore resource portfolio afterthe release of an inferred resource estimate of 390m tonnes at an average iron &#8220Fe&#8221 grade of 58.4%, for its Cloud Break project area. </p> <p>This resource estimate &#8211 the first for Cloud Break &#8211 includes a high-grade inferred zone of 116m tonnes Mt with an iron grade of 61%, the company said.</p> <p>Drilling of the Cloud Break area, contained within the company’s broader Chichester Range project area, only started in November last year.</p> <p>The company said the release of the resource estimation &#8211 completed by Fortescue’s independent consultant Snowden Consulting Group &#8211 is based on the analysis of samples from drilling of only some 60% of the targeted strike area.</p> <p>"These interim results enable Fortescue to make a substantial upward revision of its mineralisation target for the Cloud Break region to a range of 600-650m tonnes," the company said. </p> <br />