worleyparsons gets fmg contract

WorleyParsons gets FMG contract


Friday, May 19, 2006

FORTESCUE Metals Group has ticked off another box in its run to becoming a producer by 2008, awarding the engineering, procurement and construction management contract for its Pilbara Iron Ore and Infrastructure project to WorleyParsons.

http://www.miningnews.net/storyview.asp?storyid=59046§ionsource=s0

The contract follows the appointment in March of the Jan de Nui Group to complete the dredging of the Anderson Port area at Port Hedland. The value of the EPCM contract remained undisclosed.

Independent consultants Snowden completed a feasibility study for the $A2.5 billion project last month, estimating it could reap up to $1.3 billion in annual earnings before interest, taxes, depreciation and amortisation.

Snowden has estimated the initial production rate of 45Mtpa will be ramped up within 15 months of the first ore shipment to 60Mtpa and has calculated a mine life in excess of 20 years is achievable based on the current 1.1 billion tonne reserve base.

In April, FMG released results from a control estimate for the rail and port component for the project, which indicated a $1.92 billion capital cost would be required. First production from the project has been flagged for 2008.

The self-proclaimed "new force in iron ore" secured a $US200 million syndicated loan facility in late March and said it was working with international investment bank Citigroup to complete the permanent project finance package.

Shares in FMG closed 45c (5.4%) down on Fridays trade at $7.90.