Bulletin: Fortescue Metals Group Ltd. Has Financial Headroom To Undertake Eliwana Project Development; Ratings Unaffected

SYDNEY (S&P Global Ratings) May 28, 2018--S&P Global Ratings today said that its rating on Australia-based mining company Fortescue Metals Group Ltd. (BB+/Stable/--) is not affected by the group's announced development of Eliwana, a mine and rail project in Western Australia. We believe the group has meaningful financial flexibility to manage its credit metrics within our tolerances. Fortescue therefore has sufficient headroom to accommodate the proposed US$1.275 billion project at the current rating level. The proposed development should enable Fortescue to maintain production of 170 million metric tons a year, given that the company will replace production at its Firetail mine, which is approaching the end of life. At the same time, Fortescue will be able to introduce to its

...SYDNEY (S&P Global Ratings) May 28, 2018--S&P Global Ratings today said that its rating on Australia-based mining company Fortescue Metals Group Ltd. (##+/Stable/--) is not affected by the group's announced development of Eliwana, a mine and rail project in Western Australia. We believe the group has meaningful financial flexibility to manage its credit metrics within our tolerances. Fortescue therefore has sufficient headroom to accommodate the proposed US$1.275 billion project at the current rating level. The proposed development should enable Fortescue to maintain production of 170 million metric tons a year, given that the company will replace production at its Firetail mine, which is approaching the end of life. At the same time, Fortescue will be able to introduce to its product portfolio a higher-grade product with 60% Fe content. We expect the capital spend for the Eliwana project to be incurred over a three-year period: US$165 million in fiscal 2019 (ending June 30, 2019); US$760...

Bulletin