Fortescue Metals Group’s iron ore shipments have fallen in the March quarter as a cyclone and bad weather impacted its operations in the Pilbara.
The miner exported 38.7Mt of iron ore during the three months, a 4 per cent drop on the previous quarter and 2 per cent lower than the same period a year ago.
Fortescue recorded cash production costs of $US13.14 per wet metric tonne (wmt) for the quarter, a 1 per cent increase over the previous year and 9 per cent increase over the previous quarter.
The quarterly increase of 9 per cent reflected, according to FMG, “production volumes, maintenance, a higher Australian dollar and fuel prices, partially offset by Fortescue’s productivity and efficiency initiatives.” Full-year estimates for production costs now stand at $US12.00–12.50/wmt.
The company repaid $US450 million ($592 million) of debt during the quarter and reduced its annual borrowing costs by $US130 million following refinancing. Net debt was reduced from $US3.3 billion to $US3.1 billion across the quarter.
Both quarterly and year over year (YoY), the company has seen slight dips in actual amounts produced, including a 12 per cent quarterly dip in mined ore (7 per cent annual) to 41.6Mt. China accounted for 89 per cent of total shipments during the quarter.
Following on from the success of FMG’s Billion Opportunities program and the completion of the Vocational Training and Employment Centre (VTEC) last year, the company’s Aboriginal employment now stands at 15 per cent of the workforce; 797 Aboriginal people commenced employment with the company while a further 849 received driver education and health and literacy support.
Fortescue chief executive officer Elizabeth Gaines said the team at FMG has continued to deliver by maintaining focus on safety, production and cost.
“Our strategic goals of investing in the core long-term sustainability of the business while pursuing low-cost growth options are firmly in our sights as we continue to generate strong margins, leveraging Fortescue’s position at the lowest end of the global cost curve,”Gaines said.