Fortescue ore production spikes

Miner reaffirms FY guidance after reporting a jump in Sept quarter shipments.

Fortescue Metals Group (FMG) has reaffirmed full-year guidance after posting a jump in shipments in the September quarter.

In the three months to September 30, the miner shipped 25.9 million wet metric tonnes of ore, a 61% increase on the 16.1 million tonnes shipped in the September 2012 quarter.

Full-year shipments remain within previously announced guidance of between 127 million tonnes and 133 million tonnes, the miner said.

Ore mined in the quarter was 34.9 million tonnes, a 91% increase from the 18.3 million tonnes mined in the previous corresponding period, as the miner lowered strip ratios and reduced costs. 

But processing output was affected by the time taken to investigate the fatality at the Christmas Creek site, the miner said.

Fortescue said its Kings development at Solomon is close to completion, with first ore scheduled in December and sustainable production of 155 million tonnes per year forecast for the end of the March 2014 quarter. 

The company realised iron ore prices of $US121 ($127.04) a dry metric tonne in the September quarter.

Production costs fell to $US33.17 per wet metric tonne in the quarter, compared with $US49.44 per wet metric tonne in the September 2012 quarter.

Fortescue said costs are trending downwards by lower strip ratios, operational efficiencies, a reduction in operating lease payments and a lower Australian dollar.