(Reuters) - Fortescue Metals Group Ltd on Tuesday said its unit FMG Magnetite Pty Ltd and Taiwanese partner Formosa Steel IB Pty Ltd will spend about $2.6 billion to develop the second stage of a magnetite iron ore project in Western Australia.
FMG Iron Bridge Ltd, in which the world's fourth-largest iron ore miner holds an 88 percent stake, will invest a total of $2.1 billion on the project.
"The Iron Bridge Project will deliver a premium product with iron content of 67 percent," FMG Chief Executive Officer Elizabeth Gaines said in a statement.
"When combined with the Eliwana development, it will increase Fortescue's average product grade and provide the ability to deliver the majority of our products at greater than 60 percent iron content, consistent with our long term goal," she added.
Fortescue, which was hit by falling prices for its lower grade iron ore in 2018 as Chinese steel mills turned to higher-grade, less-polluting iron ore, has been trying to grow margins with a new, higher grade product.
The miner said the project will produce 22 million wet metric tonnes a year when it is running at full operational capacity.
Fortescue expects to make delivery of first ore in the first half of calendar year 2022.
(Reporting by Aditya Soni in Bengaluru; editing by Richard Pullin)
