Nyidinghu

The Fortescue Metals Group owned, Nyidinghu iron ore project, is located on the Hamersley Range boundary approximately 35 kilometres south of the company's Cloudbreak open cut iron ore mine, in the Pilbara region of Western Australia. The word Nyidinghu comes from the local Aboriginal language meaning the youngest member of a family.

The Nyidinghu Iron ore Project will Introduce a new Blend Into Fortescue's Pilbara Production

The Nyidinghu project contains two billion tonnes of high grade Brockman iron formation, bringing Fortescue Metals Group's total, 2011, Pilbara iron ore Resource, to 11.42 billion tonnes. The Nyidinghu deposit is open to the north where exploration drilling has encountered intersections of more than 100 metres. The Nyidinghu discovery will introduce a new high-value iron ore blend that will extend the life of Fortescue Metals Group's existing Pilbara iron ore mining operations. The company is currently evaluating its options regarding the maximizing of the value of the Nyidinghu discovery in relation to its existing mining operations and its infrastructure.

The Nyidinghu Iron Ore Deposit is Contained Within a 14 Square Kilometre Area

The Nyidinghu iron ore deposit, that has effectively increased the company's Cloudbreak operation Inferred Resource from 1.03 billion tonnes to 2.01 billion tonnes, at a cut off rate of 52 percent iron, is contained within an area of 14 square kilometres, with a strip ratio of less than 2:1. It is expected that further drilling could increase the deposit size by a further 400 to 500 million tonnes.

Nyidinghu Project Development is a Long Term Option

The development of the Nyidinghu project is being looked on by Fortescue Metals Group as being a larger, long term open cut iron ore mine, capable of producing up to 60 million tonnes of iron ore annually. The infrastructure needed to get the mine up and running would entail the construction of an accommodation village, an airport and a 100 kilometre long railway spur line that would connect the mine to Fortescue's existing port and rail facilities. Accessing the Nyidinghu project would be gained by road, from Port Hedland via the Great Northern Highway and the Munjina Roy Hill Road.

Nyidinghu Project Will Create Many Jobs

The Nyidinghu mine construction would involve the hiring of around 2,500 construction workers and once in production would employ around 1,200 permanent workers. The mine would have an estimated life of 15 years at a production rate of 30 million tonnes a year, with peak production reaching around 40 million tonnes annually.

It is not expected that the Nyidinghu iron ore mine will be developed in the near future because of the low iron ore prices generally being earned, although, consultants have advised a start on construction could be initiated at an early date, once all the necessary approvals are in place. It is expected, however, that in the current environment any necessary expansion will take place within existing mining operations, in preference to paying big start up costs on developing new mines.

It is ironical that the proposed 100 kilometres of new railway needed to support the Nyidinghu project development, would run alongside BHP Billiton's existing Newman railway line and along the same corridor being proposed by Aurizon in its Pilbara development plans.