Iron ore project review 2018

This year, three projects have been approved, South Flank, Eliwana and Koodaideri. We have added ten projects to our project profile including Kami, El Aouj, Shymanivske, the Koolan Island restart and Pampa de Pongo. Bloom Lake and Kaunisvarra, both brownfield projects have commenced production and will add 9Mt to the supply base. We still think the outlook for investment in projects is difficult with few approvals likely over the next 2 years. We expect the projects that progress forward will be premium grade operations. Capital intensity has fallen to an average of US$95 per tonne of capacity which reflects the preference for less capital intensive brownfield projects, revised project scopes and lower costs. However with three major sustaining projects under construction in Australia between 2018 and 2021, all competing for labour and materials, we expect to see a gradual rise in capital intensity for projects that move toward approval status.