Fortescue’s $3.1b mine surprise comes sooner than Forrest predicted

afr.com:

Fortescue will start building its $US2 billion ($3.1 billion) Australian iron ore mine and rail project within three years, according to regulatory filings that contradict chairman Andrew Forrest’s suggestion in February that the mine had been deferred until the 2030s.

The Nyidinghu mine and rail project in Western Australia’s Pilbara region is expected to cost close to $US2 billion and will unlock a major iron ore deposit which – at close to 2.4 billion tonnes – accounts for nearly 20 per cent of Fortescue’s resources and reserves.

Andrew Forrest at Fortescue’s Iron Bridge mine in the Pilbara.  

Fortescue expressed a desire to develop Nyidinghu “very rapidly” upon discovery in 2011, but the deposit has since been overlooked on several occasions as it preferred to prioritise the development of other iron ore mines such as Eliwana.

That trend looked set to continue in February, when Dr Forrest told analysts on Fortescue’s half-year earnings call that the development of Nyidinghu had been deferred beyond 2030 because Fortescue had found alternative iron ore deposits closer to its infrastructure that would be cheaper to develop.

“We are pushing Nyidinghu back into the 2030s out of the 2020s and that is because we have had a great deal of exploration success, we are consolidating around our existing operations,” he said on February 15.

The deferral of Nyidinghu into the 2030s was one of the most notable details of Fortescue’s half-year result for brokers; it prompted analysts at Citi, Goldman Sachs and Morgans to revise their assumptions for Fortescue’s capital spending schedule in notes published to clients on February 16.

But documents filed to WA’s Environment Protection Authority since February suggest Fortescue will