Fortescue Metals Group Ltd
(ASX:FMG) is today expected to sign an agreement with Chinese engineering group China Gezhouba Group Co. to help it expand its Chichester Hub iron ore operations in Western Australia.
The miner last month shelved over $17 billion worth of expansion projects in light of the federal government’s proposed Resource Super Profits Tax.
But it is pressing ahead with increasing output from the Chichester Hub, which comprises the Cloudbreak and Christmas Creek iron ore mines in the Pilbara.
The company plans to increase the production rate from 40 to 95 million tonnes per annum.
Fortescue executive director Russell Scrimshaw says fundamental design flaws in the Resource Super Profits Tax are restricting the miner from finalizing agreements for its Solomon and Western Hub projects.
The projects will remain on hold until further notice. Fortescue Metals Group reported a profit of $626.13 million for fiscal 2009.
