FMG posts record quarterly iron ore shipments

FMG posts record quarterly iron ore shipments

Thu, 26/07/2018 - 09:23
iron bridge

FMG's Iron Bridge ore processing infrastructure, located in the north west of Western Australia. Photo: Reuters

Iron ore producer Fortescue Metals Group reported record quarterly iron ore shipments on Thursday, enabling it to meet its full-year guidance.

The world's no. 4 iron ore miner shipped 46.5 million tonnes in the June quarter compared with 44.7 million tonnes a year ago, the company said in a statement. UBS had expected shipments of 46.3 million tonnes for the period.

Full-year shipments came in at 170 million tonnes, with Perth-based miner giving fiscal year 2019 production guidance of 165 million tonnes to 173 million tonnes.

Cash production costs averaged $US12.17 per wet metric tonne in the June-quarter, 7.4 percent below the previous quarter.

The miner said it expects to meet its cost guidance for 2018 and set a target of $US12-$13 per wet metric tonne for fiscal 2019.

The company, founded in 2003, forecast fiscal year 2019 total capital expenditure of $US1.2 billion.

Fortescue also said the discount for its lower quality ore had narrowed, with the miner receiving 63 percent of the average benchmark Platts 62 CFR index for its ore during the quarter, up from 62 percent in the previous quarter.

The discount for Fortescue's ore has been steadily worsening as China switches to higher grade, less polluting iron ore.

Meanwhile, the company is engaged in a tussle with rival Gina Rinehart's Hancock Prospecting to secure control of Atlas Iron, whose acquisition could unlock greater port capacity along with additional higher grade iron ore tenements.