FORTESCUE Metals Group has given the clearest sign yet it...

FORTESCUE Metals Group has given the clearest sign yet it intends to diversify out of the iron ore and steel supply chain, pegging swathes of new tenements in South Australia's major copper, gold and uranium districts.
The WA iron ore giant last year applied for 10 exploration licences covering about 4600sq/km of ground, mostly in the Woomera protected area in central South Australia.

In its tenement applications, FMG said it was looking for copper, gold and uranium – a significant departure from its current iron ore business.

According SA Government records, the bulk of FMG’s new tenements sit between OZ Minerals’ Prominent Hill copper-gold mine and BHP Billiton’s massive Olympic Dam project, slated to eventually become one of the biggest copper, gold and uranium mines in the world.

FMG currently exports about 55 million tonnes a year of iron ore from its Pilbara operations, and has embarked on an ambitious plan to boost that figure to 155 million tonnes a year by 2014, but the company has previously indicated it wants to diversify away from iron ore.

Early last year, the company expressed an interest in becoming part of the development of several large coal projects in Mongolia, and FMG has also previously established a coal exploration team in Queensland and New Zealand.

Those projects have been focussed on coking coal, however, which is also used in steel production.

A copper or gold discovery could help insulate FMG from downturns in the iron ore market, and begin to turn the company into a true diversified mining giant, similar to its Pilbara rivals in BHP and Rio Tinto.

FMG would not comment on how much it plans to invest in South Australia, or when it wants to put drilling rigs on the ground.

A spokesman said the company would not set an exploration budget or timetable until the tenements it has applied for have been granted by the South Australian Government.

“Fortescue’s primary focus remains on the Pilbara and our expansion to 155 million tonnes per annum and beyond,” he said.

“Fortescue has built a global mining house based on securing early land positions in prospective regions, so where opportunities exist to assess and secure highly prospective, early stage exploration tenements we will do so.”