Fortescue Metals Group has become the latest Australian producer to begin sending iron ore to China to satisfy that country’s insatiable appetite for resources.

Fortescue has started commercial shipping of iron ore to China’s biggest steel producer and its largest customer Baosteel.

Baosteel has signed a long term 10 million tonne per year supply contract with Fortescue for supply of iron ore from its operations in the Pilbara region of Western Australia.

This will be increased by an additional 10 million tonnes per annum once Fortescue’s production increases beyond 55 million tonnes per annum.

All top 10 Chinese steel mills have signed supply contracts for raw materials from overseas producers.

The first shipment from Herb Elliott Port at Port Headland was made last month. During a ceremony to mark the occasion Fortescue chief executive office Andrew Forrest paid tribute to all who have continued to the company’s operations in the Pilbara.

"In exactly three-and-a-half years since the first discovery hole was drilled into Cloudbreak, we have planned, designed and built the massive infrastructure needed to start shipping ore.

"After nearly 10 million man hours, 200 permits, 13,000 engineering drawings, 330 contracts, 24,000 invoices, megawatts of passion and toil with buckets of sweat, stage one of our project is almost complete.

"The impact of our first shipment will have notable consequences. The global iron ore industry is now experiencing an abrupt change in the course of its massive consolidation.
"A vanguard of industry juniors has been further energized by our example. Steel mills across Asia, and, the workforces of the Pilbara, welcome a major new low cost supplier and a high quality alternative employer.”

Fortescue is now completing the last commissioning phases of the mine, rail and port operations and is increasing production from its existing operations to 55 million tonnes per annum.

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