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Fortescue Metals Group announces June quarter production results

Mining News - Published on Thu, 26 Jul 2018

Image Source: Live Trading News
Fortescue has released its June 2018 quarterly production results, reporting record iron ore shipments of 46.5 million tonnes (mt) and cash production costs (C1) of US$12.17 per wet metric tonne (wmt).

HIGHLIGHTS – JUNE 2018 QUARTER
• TRIFR of 3.6
• US$12.17/wmt C1 cost
• 46.5mt shipped taking full year shipments to 170mt
• US$160 million of debt repaid reducing gross debt to US$4.0 billion at 30 June 2018
• Approval of the Eliwana mine and rail project

This result brings FY18 shipments to 170mt with an estimated full year C1 cost of US$12.36/wmt which is equivalent to US$11.83/wmt after normalising for an original assumed exchange rate of US$0.75 and an oil price of US$53 per barrel (WTI).

During the quarter, Fortescue’s Board formally approved the development of the US$1.275 billion Eliwana project which will underpin the introduction of a 60 per cent iron grade product. First ore from Eliwana is scheduled to be delivered in December 2020.

Cash on hand at 30 June 2018 was US$863 million following the repayment of the balance of the 9.75% Senior Secured Notes (US$160 million) and payment of the interim FY18 dividend (US$264 million) during the quarter. Net debt was US$3.1 billion.

Guidance for FY19 has been provided targeting total shipments of between 165-173mt, C1 costs between US$12-13/wmt and total capital expenditure of US$1.2 billion.

Fortescue Chief Executive Officer, Elizabeth Gaines, said “It was a strong finish to FY18 with the team delivering record shipments of 46.5mt in the quarter to achieve our target of 170mt for the full year. Importantly, this was delivered while maintaining our focus on costs which decreased by 7 per cent compared to the March quarter. Building on our outstanding operational performance in the quarter, Fortescue has delivered on key strategic initiatives which position us for the next phase of growth while improving safety and productivity, ensuring we remain the lowest cost producer of seaborne iron ore.”

The strategic initiatives achieved in the quarter include:

Board approval of the US$1.275 billion Eliwana project providing greater flexibility to capitalise on market dynamics while maintaining production capacity

Conversion of over 100 trucks to autonomous haulage (AHS) at the Chichester Hub continues to progress with 19 trucks now operational

Successful commissioning of the relocatable conveyor at Cloudbreak

Further reduction in gross debt and restructure of the balance sheet to investment grade terms and conditions lowering annual borrowing costs by US$130 million

Continued development of low cost growth options through exploration activities in Australia and overseas

Source :

Posted By : Joykumar Irom on Thu, 26 Jul 2018
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