Fortescue Metals has highlighted how its debt strategy is starting to pay dividends for the miner at Diggers & Dealers.
It’s hard being an iron ore miner at a gold show, as it was for FMG at this year’s Diggers & Dealers, yet the miner still managed to grab the audience’s attention.
While the focus has been on what one CEO termed ‘the rock stars’ of this year’s event, Fortescue CEO Nev Power used the show to showcase how the miner has dramatically driven down debt as well as its productivity push.
To date the miner has repaid around US$2.3 billion, with an existing net debt of $5.2 billion, and around $1.6 billion in cash on hand, Power told Diggers & Dealers.
Despite the ongoing economic slowdown in China, Power remained positive, stating consumption rates – though dampened – are unlikely to evaporate, and China will remain a major consumer of iron ore to fulfil its steel demands.
In terms of productivity, Power stated the miner has recorded positive results from its automated truck fleet, seeing a 20 per cent increase in efficiency compared to its manned fleets.
According to professor of mining engineering at the University of British Colombia, John Meech, this rate is at the top level of automated truck productivity levels.
When Australian Mining asked how they achieved these rates, when fellow iron ore miner Rio Tinto’s automated fleets are recording a 12 per cent production and efficiency increase over manned vehicles, Power said he did not know.
“I’ve no idea,” he said.
While he was unsure of how they achieved this rate, he outlined that they have moved around 200 million tonnes using its automated fleet of around 47 trucks at Solomon Hub.
He went on to state the grades at Solomon have helped the miner move down the cost curve, becoming one of three lowest cost iron ore producers, along with BHP and Rio Tinto.
Power also commented on the progression of FMG’s MoU with Vale to blend their ores.
“We’re finalising laboratory trials,” he told Australian Mining.
“It’s going well, we’re looking at a number of solutions for customers, trialling different blends.”
He went on to say working on getting the blend right is like trying create a pre-mix cake mix.