What's with the Fortescue (ASX:FMG) share price today?

The Fortescue (ASX: FMG) share price is flat after announcing more details for its Iron Bridge magnetite project.

| More on:
A worried miner looks at his phone in front of a massive drilling, indicating a share price drop for ASX mining companies

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fortescue Metals Group Ltd (ASX: FMG) announced an update for its Iron Bridge Magnetite Project today. The Fortescue share price opened strongly this morning, pushing 2.55% higher to an intraday high of $22.84. However, its shares have given back their gains, currently trading at $22.32, 0.22% higher.

Fortescue share price flat on Iron Bridge update

Fortescue's Iron Bridge project has raised questions in the past due to potentially higher than expected capex expenditure. As well as the company's leadership change in February which saw the resignation of its project director, Manie McDonald.

Today, investors will receive greater visibility into the project after the completion of both technical and commercial assessments.

Fortescue reports that the Iron Bridge project is expected to deliver 22 million tonnes per annum (mtpa) of high grade 67% Fe magnetite concentrate. To add some perspective, the company mined some 204.3 million wet metric tonnes (wmt) of ore in FY20. First production is expected to take place by December 2022 and ramp up to full production rate over the next 12 to 18 months.

The company has made a number of strategic investments to enhance the product range, increase production and shipping capacity to meet today's strong demand for iron ore.

Fortescue estimates that it will need to front up its share of US$2.5 billion to US$2.7 billion of the total US$3.3 billion to US$3.5 billion of capital expenditure. The update also flags that the joint venture has incurred capital expenditure of US$1.5 billion as at 30 April 2021, with Fortescue's share of US$1.3 billion.

The project is expected to diversify Fortescue's product mix, bringing on board 67% Fe content low impurity concentrate. This compares to the lower grade iron ore that Fortescue is usually known for.

From a cost perspective, the mine possesses a competitive cost structure with life of mine C1 cost estimates of US$33 to US$38 wmt.

Management commentary

Fortescue CEO Elizabeth Gains said Iron Bridge was well positioned to meet market demand and deliver strong returns for the joint venture and stakeholders.

The iron ore market fundamentals support the investment in the Iron Bridge project, and we anticipate strong demand for this high value-in-use product, which will attract a premium to the Platts 65% Fe CFR Index.

Led by our highly experienced project team, completion of the technical and commercial assessment of the Iron Bridge project has confirmed the optimal transportation solution, while also addressing contractor and logistical constraints, managing capital costs and confirming first production by December 2022.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A young female investor sits in her home office looking at her ipad and smiling as she sees the QBE share price rising
Share Market News

5 things to watch on the ASX 200 on Friday

A good finish to the week is expected for Aussie investors.

Read more »

A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.
Technology Shares

ASX investors are obsessed with Nvidia shares! Here's why

The global chipmaker reported a 94% increase in annual revenue in the third quarter.

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two racing cars battle to take first place on a formula one track with one tailing the the leader and looking to overtake the car.
Opinions

Down 21% in 2024. This ASX 300 stock looks like a money-making monster

Profits are expected to plunge, but the future could still be bright.

Read more »

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
52-Week Lows

Down 68% from highs, this ASX 200 stock just hit a 4-year low. Time to pounce?

Is this beaten down stock a buy? Let's see what one leading broker is saying.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Share Market News

Insider buying alert: 3 ASX 200 shares directors are snapping up right now

Directors in some of Australia's blue-chip businesses aren't shying away from the market.

Read more »