The Fortescue Metals Group Limited (ASX: FMG) share price has dropped lower on Friday with the rest of the market. This is despite the release of a positive announcement this morning.
At the time of writing the iron ore producer’s shares are down 2% to $17.75.
What did Fortescue announce?
This morning Fortescue announced that it has received approval to increase the material handling capacity of its Herb Elliott Port facility from 175 million tonnes per annum (mtpa) to 210mtpa on a staged basis.
This includes provisions for 188mtpa of hematite ore and 22mtpa of magnetite concentrate. The high-grade magnetite product will be produced from its Iron Bridge Magnetite operations, with the first ore shipments scheduled for mid-2022.
According to the release, the revised licence utilises the capacity of Fortescue’s existing port infrastructure. This comprises five berths and three ship loaders and supports the company’s FY 2021 iron ore shipments guidance of 175mt to 180mt.
World leading port operations.
Fortescue’s Chief Executive Officer, Elizabeth Gaines, notes that its port operations are world leading and continue to demonstrate its capacity to optimise the efficiency and productivity of its infrastructure to deliver iron ore to customers.
She added: “The increase in the licensed capacity of Fortescue’s Herb Elliott Port from 175mtpa to 210mtpa is in line with our strategy to deliver growth through investment, including the US$2.6 billion investment in the Iron Bridge project.”
“This significant project will deliver 22mtpa of high-grade magnetite product, enhancing the range of products available to our customers through our flexible integrated operations and marketing strategy,” the chief executive said.
The company also commented on concerns over the dust levels in the area. It will maintain a high level of vigilance over its management of dust in Port Hedland. This includes the installation and implementation of additional controls ensuring no net increase in dust emissions as a result of the progressive increase in throughput capacity at Herb Elliott Port.
ASX 20 addition.
In other news, this morning Fortescue was added to the ASX 20 index along with supermarket giant Coles Group Ltd (ASX: COL). This index contains the 20 largest listed companies on the Australian share market.
They have joined the large cap index at the expense of Scentre Group (ASX: SCG) and Suncorp Group Ltd (ASX: SUN).
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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