Fortescue maintains FY guidance despite lower March quarter output

PERTH (miningweekly.com) – Significant wet weather in the three months to March has seen iron-ore miner Fortescue Metals’ tonnage slip, while C1 cash costs rose by 4%.

The miner on Thursday reported that total ore shipped for the quarter under review reached 39.6-million tonnes, compared with 42.2-million tonnes produced in the second quarter of 2017.

C1 costs for the quarter increased from the $12.54/t in the second quarter, to $13.06/t in the quarter under review.

Fortescue noted that production and shipping were in line with expectations, although lower than the previous quarter as a result of heavy rainfall at the mine sites in the Pilbara, and several closures of the port owing to tropical storms.

The C1 cost increase reflected the lower production volume associated with the weather impacts, and was in line with the cost reported for the first half of 2017.

“Our teams continued to deliver excellent results with improved safety performance and operating margins compared to our first half results,” said Fortescue CEO Nev Power.

“The average realised iron-ore price of $65/t with a C1 cost of $13.06/t generated strong cash flows, which we applied to a further $1-billion debt repayment,” he said.

Despite the lower production, Fortescue remained on track to meet its production guidance of between 165-million and 170-million tonnes for the full year, at a C1 cost of between $12/t and $13/t.