Fortescue Metals Group, the world's fourth largest iron ore miner, said its board has approved the development of a $US1.28 billion mine and rail project in Western Australia, in a bid to boost the price it gets for its iron ore.
Fortescue is eager to improve the quality of its iron ore as its biggest customer, China, is increasingly demanding higher quality ore for steel mills to help cut smog.
Production from the mine is set to start in December 2020 and is expected to yield higher quality ore, closer to the benchmark of 62 percent iron content.
The project, named Eliwana, will help Fortescue maintain a 170 million tonnes per annum production rate for over 20 years, the company said in a statement to the Australian Securities Exchange.
"This project allows us to commence the supply of Fortescue premium product to the market from existing operations in the second half of FY19 with volumes increased as Eliwana ramps up to full production," Fortescue chief executive Elizabeth Gaines said.
The project would create up to 1,900 jobs during construction and 500 full-time positions once operational.