Fortescue slashes costs for eight consecutive quarter

PERTH (miningweekly.com) – Iron-ore miner Fortescue Metals on Thursday reported record low cash production costs for the quarter ended December, while maintaining a strong production performance.

During the second quarter ended December, Fortescue shipped 42.1-million tonnes of iron-ore, compared with the 41.9-million tonnes shipped in the previous quarter.

C1 cash costs for the quarter dropped to $15.80/t, compared with the $16.90/t reported in the previous quarter. The C1 cash costs for the December quarter was also a 45% improvement on the previous corresponding period.

“The outstanding performance of our team combined with world-class assets and effective strategy are driving sustainable improvements with production costs lowered for the eight consecutive quarter,” said Fortescue CEO Nev Power.

“This continues to generate positive operating cash flows, which has allowed net debt to be reduced to $6.1-billion.”

During the quarter under review, Fortescue spent $46-million in capital, taking its half-year expenditure to $88-million. For the full year, the miner had revised its capital expenditure to $200-million, to reflect the savings achieved in the first half.

Fortescue noted that cost performance during the December quarter was well ahead of the 2016 full-year target of $15/t, with the miner adding that its full-year output guidance remained unchanged at 165-million tonnes.