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Australia's Fortescue green lights $287 mln mine development

Credit: REUTERS/MELANIE BURTON

Fortescue Metals Group Ltd on Wednesday said it will spend about $287 million to develop the Queens Valley mining area in the iron ore rich Pilbara region of Western Australia.

Adds CEO comment, background

May 22 (Reuters) - Fortescue Metals Group Ltd FMG.AX on Wednesday said it will spend about $287 million to develop the Queens Valley mining area in the iron ore rich Pilbara region of Western Australia.

The development is part of the world's No.4 iron ore miner's plan to boost margins through higher grade products, Fortescue said in a statement.

"The Queens mining area development will maintain our highly valued Kings Fines low-alumina sinter fines product which supplies Fortescue's key customers in China as well as in Japan and Korea," Chief Executive Officer, Elizabeth Gaines said.

Fortescue has been attempting to shore up demand by moving to produce higher grade iron ore, given that its lower grade products had fallen out of favor with Chinese buyers facing environmental restrictions.

In April, the miner said it would spend about $2.6 billion with a Taiwanese partner to develop a "premium product" iron ore project in Western Australia.

The Queens development is estimated to have a life of 10-15 years. The miner has obtained environmental and heritage approvals to start work on the project.

(Reporting by Aditya Soni in Bengaluru; Editing by Richard Pullin)

((Aditya.Soni@thomsonreuters.com; +91 80 6749 1130; Reuters Messaging: Aditya.Soni.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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