Fortescue Metals Group is remaining tight-lipped amid growing fears of a big blowout in costs at its Iron Bridge magnetite project in the Pilbara and reports senior project leaders have departed the company. The Australian newspaper is reporting Fortescue’s director of projects Don Hyma has parted ways with Fortescue after only two years, along with the Iron Bridge project manager. It is reported the $US2.6 billion ($3.35b) Iron Bridge is facing cost overruns of nearly $1 billion. Fortescue has confirmed costs and scheduling for the project are undergoing a detailed review. Investors will be looking for some guidance on the status of the project when the company reports its first half result on Thursday, though the company could update the market before then. It is understood Iron Bridge has been hit by rising steel costs, a firmer Australian dollar and a shortage of temporary skilled labour because of border restrictions amid the coronavirus pandemic. A joint venture between Fortescue, Taiwan’s Formosa and China’s Baosteel, Iron Bridge lies 145km south of Port Hedland and is due to enter production in mid-2022. It is expected to deliver annual production of 22 million tonnes of low-impurity, 67 per cent iron concentrate. Stage two works were approved in 2019 and were expected to create 3000 construction jobs and 900 full-time operations roles. The works include an ore processing facility, airstrip and village, a 195km water pipeline, a 135km concentrate pipeline to Port Hedland and new port handling facilities. Iron Bridge is Fortescue’s first magnetite project. FMG has historically focused on haematite direct shipping ore projects in the Pilbara. The project is part of the company’s strategy to boost the average iron grade of its product above 60 per cent. While magnetite operations deliver a higher-grade product, beneficiating the ore typically costs more and uses more energy intensive processing. Magnetite projects have had a poor track record in WA with Ansteel’s Karara magnetite project in the Mid West and CITIC Pacific Mining’s Sino Iron project at Cape Preston also experiencing cost blowouts in development. Both have also struggled to operate profitably because of high operating costs and processing problems. When Fortescue sanctioned the project in April 2019, chief executive Elizabeth Gaines said Fortescue had effectively de-risked Iron Bridge by investing $US500 million since 2010 in developing a pilot plant that produced a concentrate product. She said Iron Bridge would also benefit from Fortescue’s “unparalleled track record in successfully developing infrastructure and mining projects in the Pilbara”. Chief operating officer Greg Lilleyman said Fortescue had developed a process flowsheet specifically tailored to Iron Bridge’s low moisture ore, allowing for one of the most cost and energy-efficient magnetite operations globally. Fortescue shares were up 27¢, or one per cent, at the open to $24.10.