It's all OK on surface as Fortescue hires Ausdrill

A Fortescue spokesman said the Ausdrill contract was to deal with overburden removal at the flagship Cloudbreak mine as well as at the proposed Christmas Creek site, 44 kilometres further east. Ausdrill would also carry out grade-control drilling.

Fortescue's decision to use surface miners over traditional drill-and-blast techniques used by Pilbara iron ore leaders Rio Tinto and BHP Billiton has raised eyebrows, but Fortescue has argued that the work will allow it to ramp up production from a standing start to about 55million tonnes a year in less than a year. Since Fortescue's $2.8 billion mine-to-port project officially began in May, Fortescue has rejected speculation that its surface miners were not performing as planned.

Yesterday's news on contracting Ausdrill rekindled speculation, as Ausdrill trumpeted the Fortescue deal as its "largest drill and blast contract with more than 30 drill rigs".

Rio is believed to have a similar number of rigs across its far-bigger Pilbara operation where drill-and-blast is the sole mining method.

Ausdrill is already contracted to Fortescue and the $300 million proposed contract is both an extension and expansion of existing work over the next five years, weighted towards 2010 by when Christmas Creek mine should be in operation.

Fortescue has 10 surface miners operating at Cloudbreak, with two under construction and another two ordered.

Cloudbreak is 260 kilometres south of Port Hedland, connected by Fortescue's upgraded railway line. Fortescue shares yesterday shed another 31 to $6.19, down from a peak of $13.15 two months ago.

Mr Forrest's 36.5% Fortescue stake is now worth $6.2 billion, from $13 billion-plus two months ago, losing him title of Australia's richest man.