Andrew Forrest’s Fortescue Metals Group could be facing a cost blow-out totalling hundreds of millions of dollars on its Iron Bridge magnetite project in the Pilbara, sources suggest. The $US2.6b ($3.3b) joint venture project is being built 145km south of Port Hedland with Taiwan’s Formosa and China’s Baosteel, and is due to start production in mid-2022. But The Australian, citing industry sources, said rising costs associated with the construction of non-processing and pipeline infrastructure and the massive processing plant and mine could force FMG to revise its costs by up to 25 per cent. Iron Bridge is set to deliver annual production of 22 million tonnes of low-impurity, 67 per cent iron concentrate. Stage two works were given the green light in 2019 and were expected to create 3000 construction jobs and 900 full-time positions once operations start in the first half of next year. The works included building an airstrip and expanding the accommodation village, construction of a 195km water pipeline, a 135km concentrate pipeline to FMG’s Herb Elliott port facility and a return process water pipeline and extra port-handling facilities. Industry sources told The Australian that major projects in WA were under pressure from a fluctuating dollar, rising input costs and a shortage of temporary skilled labour because of the coronavirus pandemic. It is understood FMG is now looking at ways to rein-in costs. The project is owned by FMG Iron Bridge (69 per cent) and Formosa (31 per cent), with Fortescue holding an 88 per cent stake in FMG IB and its subsidiary FMG Magnetite. A subsidiary of Baosteel holds 12 per cent of FMG IB. Fortescue shares closed up 42¢ at $25.18 yesterday.