Christmas Creek Iron Ore Mine, Australia

Christmas Creek iron ore mine is operated by Fortescue Metals Group (FMG), Australia’s third-largest iron ore producer. The mine is part of FMG's integrated mining operations, which include Cloudbreak, an established FMG mine.

Operations at Christmas Creek are combined with activities at Cloudbreak. Both deposits are located 110km north of Newman, in the east Pilbara region of Western Australia, and extend between 250km and 325km south-east of Port Hedland.

Christmas Creek is 40km east of Cloudbreak. Ore from Christmas Creek is transported to Cloudbreak's ore processing facility, where it is blended with Cloudbreak's output. Christmas Creek ore is transported to Cloudbreak via a road train.

Christmas Creek is significantly larger than Cloudbreak. The mine's first overburden blast was completed in February 2009 and production began in April 2009.

Both mines are operated by FMG. To boost integrated mining operations, Fortescue approved a A$360m ($330m) expansion programme in October 2009.

The expansion will begin in November and is scheduled for completion in 2011. It will increase the company's annual production capacity to 55mt. The company's current combined production is 35mt.

Christmas Creek has the capacity to produce 6mt of ore per year. After the expansion, the mine is likely to produce about 23mt of ore per year.

Expansion

The expansion will involve the construction of a 50km railroad from Cloudbreak to Christmas Creek mine. The railroad will be an extension of an existing 260km rail line that connects Cloudbreak to Port Hedland.

The line carries ore along a 1,435mm gauge heavy haul railway. The mine is also connected to Port Hedland via a 2.4km airstrip and has road access to the Great Northern Highway.

The expansion will also include the construction of an ore processing plant at Christmas Creek. It will allow both mines to operate concurrently and make FMG one of the leading iron ore producers in Australia.

Geology and reserves

Christmas Creek is composed of flat-lying ore deposits. They include iron, silica, aluminium and phosphorous minerals.

The reserve base at Christmas Creek is much larger than the deposit at Cloudbreak. The current reserve of Christmas Creek is estimated to be 997mt, with proven reserves of 3.4mt of high-grade minerals. Cloudbreak has a reserve base of 628mt. The proven reserve at Cloudbreak is estimated to be 91mt of high-grade minerals.

Mining and processing

Christmas Creek is mined using methods adopted in open pit mines, which are similar to those used at Cloudbreak.

New pits are opened progressively after backfilling old ones through strip mining. Instead of the traditional techniques of drilling, blasting and excavating, the Cloudbreak deposit was mined using about 2,500 Wirtgen surface miners. Each miner weighed 100t and had about 1,000 horsepower.

At Cloudbreak ore is supplied to the processing plant via overland conveyors. The conveyor system covers the entire strike length of the Cloudbreak and Christmas Creek deposits.

The processing plant at Cloudbreak crushes and screens high-grade ore to produce both lump and fine products.

Finance

The expansion will be financed by FMG. The project was to have been funded by Chinese investors. However, after an agreement to borrow approximately $6bn from the investors was delayed, the company decided to use its own funds.