Fortescue Metals Group has started the 2020 financial year with 42.2 million tonnes of shipments, a 5 per cent improvement on the corresponding period last year.
This, however, represents a 9 per cent drop of total ore shipments from the record-breaking June quarter, as Fortescue’s mining, processing, rail and shipping operations were hit by seasonal maintenance activity.
Fortescue chief executive officer Elizabeth Gaines was still pleased with the result, with the company’s shipping guidance remaining unchanged at 170–175 million tonnes for the 2020 financial year.
Gaines said the Fortescue team had delivered a strong performance across all aspects of the business in the first quarter of the 2020 financial year, building on its record results in the 2019 financial year.
Fortescue also maintained its enhanced product mix in the September period, with strong demand for its 60.1 per cent iron content West Pilbara Fines, according to Gaines.
“This is reflected in Fortescue’s contractual price realisation, which averaged 89 per cent of the benchmark 62 per cent cost and freight index price during the quarter,” she added.
“The combination of operational performance and realised price has generated exceptional operating cashflows and lowered net debt to $US0.5 billion ($0.73 billion) at 30 September 2019.”
Fortescue reported a busy September quarter in respect to new projects, with a sod turning ceremony at the Eliwana mine and rail project in the Pilbara region, Western Australia, in July, and towage operations starting at the port of Port Hedland in September.
The company’s $US2.6 billion Iron Bridge magnetite project is on schedule and budget to produce 67 per cent iron grade concentrate product in the first half of 2022.
Fortescue has commenced preliminary site works at Iron Bridge, with road upgrades, earthworks and village construction under way.
The company anticipates Iron Bridge will have an annual capacity of 22 million wet metric tonnes once fully operational, delivering a premium product with 67 per cent iron content.
Fortescue also continued its positive safety streak in the September period, with a total recordable injury frequency rate improving by 4 per cent to 2.7 per cent in June.