PB The following probably has little to do with NWH – it simply...

PB

The following probably has little to do with NWH – it simply reflects a though that sprung to mind when I clicked onto the link that you provided. China is becoming fussier about the quality of iron ore that it imports, and hence the quality premium has grown, so mine expansions that seemed viable a few years ago, may have to be tweaked to favour quality over volume.

There are many things other than phosphorus (P) content that affect the price of direct ship iron ore, so when I write only about the iron (Fe) content here, you must assume that other contaminants are not too high, and/or other characteristics are not patently unfavourable. Basically, to get a premium price for lump and fines, the Fe content should be above 60%, and P content not higher that .1% of the Fe content – so if Fe is 60%, then P should not exceed .06%. Lump is worth more than fines, because it does not have to be sintered before being fed into the furnace. I have not been able to establish the specification of RIO's Pilbara Blend, but I suspect that for Fe and P, it would be something like 60% and .06% respectfully.

FMG is at a disadvantage to RIO in that its typical exported ores are below RIO's standard Pilbera Blend product – see http://www.abc.net.au/news/2018-02-21/fortescue-metals-profit-plummets/9470556. If FMG were more selective as to where it focuses its CAPEX, then it may decide to settle for less volume and better quality. Consequently, in developing its Western Hub resources, it may kick off with Flying Fish mine rather than concurrently developing Flying Fish and Eliwana. If you look at that link that you provided (http://curiousprofessional.com/guide-to-fortescue-metals-group-fmg-western-hub-eliwana-flying-fish/) you will see that the Eliwana includes high-phosphorus Brockman ore, which pushes the average P content of the Elwina project to .102% relative to Fe of 58.8%. In contrast, the Flying Fish project has a P of .05 7% for a Fe of 59.9%, which falls within the so-called Bessemer limit.