Fortescue Metals Group has posted a dip in shipping rates in the September quarter. The 40.2Mt it recorded were a 14 per cent fall on last quarter’s record and a 9 per cent drop year on year (YoY).
This is expected to improve in the next quarter, however, as Fortescue prepares to deliver its first shipment of high quality 60.1 per cent iron grade product.
This higher-grade product is particularly desirable for international steel mill markets in China.
Fortescue chief executive officer Elizabeth Gaines said, “Shipments of our 60.1 per cent iron grade product, West Pilbara Fines (WPF), are scheduled to commence from December this year, further enhancing our product mix.”
Gaines otherwise called it “a strong start” to the company’s 2019 financial year, with Fortescue mining 51.9Mt of ore in the September quarter to maintain its full-year guidance target of 165–173Mt.
“Following record shipments in the last quarter of financial year 2018, we have rebuilt our iron ore inventories and prepared new areas for mining, which increased total material moved by 11 per cent during the quarter, positioning us to achieve financial year 2019 targets”, Gaines said.
Large increases in overburden removal to 85Mt in the quarter also helped to contribute to a three-month cost increase of 8 per cent to $US13.19 ($18.69) per wet metric tonne.
Fortescue’s development and innovation projects have also moved in a positive direction, according to Gaines.
“The Eliwana mine and rail development project is progressing and our innovation projects across the Chichesters, including the Christmas Creek autonomous haulage fleet conversion and the Cloudbreak relocatable conveyor continue to contribute to our productivity and efficiency improvements,” Gaines said.
Fortescue’s total recordable injury frequency rate (TRIFR) also increased 10 per cent over the previous quarter from 3.6 to 3.9, and 30 per cent from 3 to 3.9 over the past 12 months.
Earlier this month, Fortescue revealed it was planning to launch a share buyback program worth up to $500 million.