Fortescue Sets Record Highs for Iron Ore Shipments While Lowering Costs

January 23, 2025 11:29 AM AEDT | By Team Kalkine Media

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Fortescue Sets Record Highs for Iron Ore Shipments While Lowering Costs — Image source: shutterstock

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Highlights

Fortescue's iron ore shipments hit record highs in the first half.

Operational costs were reduced significantly in Q2.

The company advances toward its zero-emission mining goal by 2030.

Mining leader Fortescue Metals Group (ASX:FMG) delivered strong operational performance in the December quarter, achieving higher iron ore shipments and reduced production costs, all while advancing its ambitious sustainability goals.

In the December quarter, Fortescue shipped 49.4 million tonnes of iron ore, representing a modest 1% growth compared to the same period last year. This brought first-half shipments to 97.1 million tonnes, setting a record for the company. Fortescue reaffirmed its full-year guidance of shipping between 190 million and 200 million tonnes, ensuring consistency in output despite a dynamic market environment.

Cost management was another bright spot for Fortescue in Q2. Its production costs declined 10% quarter-on-quarter, settling at $18.24 USD ($29.09 AUD) per wet metric tonne. This figure not only reflects improved efficiency but also came in below the company's annual guidance range of $18.50 USD to $19.75 USD per wet metric tonne.

From a financial standpoint, Fortescue closed the quarter with $3.4 billion USD in cash reserves. The company also recorded a net debt position of $2 billion USD after allocating $1 billion USD to capital expenditure in the same quarter, showcasing robust financial health while continuing investments in strategic initiatives.

Sustainability also remains central to Fortescue's long-term plans. The company reiterated its target of transitioning its diesel-powered mining fleet to zero-emission equipment by 2030. A significant milestone in this journey was achieved when Fortescue awarded a major contract to Xuzhou Construction Machinery Group (XCMG).

By combining its focus on cost control, increased shipments, and ambitious decarbonization goals, Fortescue is well-positioned to navigate the evolving challenges and opportunities of the mining sector.

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