Storm strikes Fortescue results

Wild weather is to blame for weaker iron ore production, Fortescue Metals Group today told investors.

Releasing its December quarter results the iron ore miner said total FY14 shipments are now expected to be at the lower end of previous guidance at 127 million tonnes.

Late last year Tropical Cyclone Christine battered the Pilbara coast, forcing the closure of the Port Hedland port for three days.

However Fortescue still managed to break its previous shipping record in the three months to December, exporting 28 million tonnes of ore, an increase of eight per cent quarter on quarter and 43 per cent compared to the same period in 2012.

The miner has also increased its financial year capital expenditure guidance from $500 to $700 million as it ramps up efforts to expand operations to 155 million tonnes per annum, adding extra engineering and materials handling capabilities at its Solomon project and commissions its new Kings mine.

The jump brings total capital expenditure for the expansion which is due to be completed by the end of March to $US9.2 billion.

On average Fortescue managed to receive $US125 per dry metric tonne over the quarter.

Cash costs for the December quarter were on par with the previous quarter at $US32.99/tonne.

Fortescue said it remains sensitive to exchange rate movements and is expecting the Aussie-US dollar exchange to hover around $AUD0.90.

As a result it has revised its FY14 cost guidance to $US34/wmt.

Fortescue shares have fallen 4.34 per cent to $5.07 a share since this morning.

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