Fortescue Metals Group Ltd.'s decision to develop either its Nyidinghu or Eliwana deposit as a replacement for its Firetail mine does not hinge upon the recent native title decision handed down by Australia's Federal Court, according to CEO Nev Power.
In July, the court ruled that the Yindjibarndi native title group was entitled to exclusive rights over unallocated crown land occupied by the company's Solomon Hub operation in Western Australia's Pilbara region.
While neither of the deposits are on land covered by the Yindjibarndi native title agreement, Fortescue will need to build transport infrastructure to connect either deposit to its other operations.
"Obviously it's something we take into account, but we're not concerned about the tenure there," Power told reporters Aug. 8 at the Diggers & Dealers Mining Forum in Kalgoorlie, Australia. "We have all of the tenure that we need at Solomon and we're very confident about getting tenure for that development. It's a factor in it, but it's not a go/no go."
The Firetail deposit contributes about 27 million tonnes of iron ore each year to the Solomon Hub operations.
Fortescue has been debating whether to develop a new mine at Nyidinghu, which lies about 40 kilometers south of its Chichester Hub operations, or extend the rail line to its Eliwana deposit, part of the Western Hub operations 130 kilometers to the west.
"There's probably some issues around rail infrastructure and road infrastructure and a few bits and pieces like that, but again we're not concerned about being able to get that, but all of those factors obviously go into the decision process," he said.
Following the handing down of the court's decision, Fortescue indicated it will probably appeal, but Power believes it will be some time before a final outcome will be known.
"I don't know that we're going to see any clear result come out of the native title decision for quite some time," he said. "I would expect that to be two or three years away before we'd get any real clarity out of that."
Fortescue still has not seen the full ruling that was handed down and wants to review that before it makes its next move.
"It looks unusual to us because it has been quite different to previous cases that have been handed down, so we want to review that carefully because it does have major ramifications not only for us but the whole mining industry and probably the whole [of Western Australia]," Power said.
Fortescue expects that both its Nyidinghu and Eliwana deposits will be developed, it is just dependent on timing. The company will likely make a decision on which deposit it will develop as the Firetail replacement by the end of the 2018 financial year, with the aim of being in production by 2020.
Meanwhile, Fortescue also does not have any concerns over the Western Australian government's review of the state's rail access regime, which covers the company's rail infrastructure.
"What I would say to that is we welcome third party access on our rail line, as we've always maintained, it just needs to be on a solid commercial basis and we have the ability to expand our rail and port capacity if there was the right level of demand there," Power told reporters.
However, the executive argued that the third parties wanting to use Fortescue's infrastructure need to have economic projects and the cash to develop them.
"I think the area of difficulty that this introduces is if those people wanting to use infrastructure aren't able to finance and fund their own sides of their business," he said. "That's where we've found it difficult in the past, that it wasn't us that wasn't able to do it, they weren't able to raise the funding to do their own mine developments or put the infrastructure in to connect up."
Fortescue previously tried to block Brockman Mining Ltd. from accessing its rail infrastructure because it believed the company's Marillana iron ore project was uneconomic.
In September 2016, Australia's High Court rejected Fortescue's final appeal to prevent Brockman from gaining access to its rail infrastructure.