Fortescue Metals Group continues to reduce its debt with the company saying a further US$1 billion ($1.36 billion) will be repaid next week.
The iron ore miner has enjoyed much improved market conditions in recent months, which have been complemented by the company’s productivity and efficiency strategies.
Its latest debt payment, which will be formally made on December 23, follows a US$700 million repayment made in September.
Fortescue chief executive officer Nev Power said the US$1 billion payment was a continuation of the company’s focussed debt repayment strategy and further lowers its total cost position.
“Fortescue’s nearest debt maturity is in June 2019 and is now less than US$2 billion with gross gearing falling below our targeted 40 per cent level once this payment is made,” Power said.
“Our productivity and efficiency initiatives have achieved sustained cost reductions and combined with buoyant market conditions are generating significant free cash flow which will further strengthen Fortescue’s balance sheet.”