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

sdf

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

Person handing out $100 notes, symbolising ex-dividend date.
Share Market News

$20,000 invested in CBA and these ASX 200 shares 5 years ago is worth

Did these shares deliver the goods for investors? Let's find out.

Read more »

a business person checks his mobile phone outside a Wall Street office with an American flag and other business people in the background.
Share Market News

Is the 'sell America' trade back?

Institutional investors appear to be at odds with retail investors.

Read more »

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing end to a disappointing week for investors this Friday.

Read more »

Six smiling office colleagues stand in a row and look at the camera.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why ANZ, Clarity, IGO, and Pilbara Minerals shares are dropping today

These shares are ending the week in the red. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Betr, Centuria Capital, GR Engineering, and Mach7 shares are pushing higher

These shares are having a good finish to the week. But why?

Read more »

woman holding 'hiring' sign in shop
Broker Notes

How much upside does Macquarie tip for Seek shares?

The broker recently reviewed Australian job ad volumes for May.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Broker Notes

Macquarie tips 50% return for this cheap ASX All Ords stock

Let's see which stock the broker is feeling bullish about this week.

Read more »