Being the lowest cost producer has meant that demand for Australian iron ore has continued to rise while other producers have been forced to cut back. However, the miner says sharp reductions in its operating costs have bolstered margins and helped it resume that endeavor to reduce its indebtedness.
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“Our team is continuing to deliver sustainable cost reductions through an unwavering focus on optimizing every aspect of Fortescue’s operations”, Power said in the statement. The report also includes demand drivers affecting the global iron ore mining industry, world steel demand by region, profiles of major iron ore producing companies and information on the active, exploration and development projects by region.
Fortescue shares closed up 6 percent at A$2.29, outpacing a gain of less than 1 percent in the broader Australian market.
– Australia was the largest exporter of iron ores and concentrates (including roasted iron pyrites) in 2014, exporting 755.1Mt, followed by Brazil (344.4Mt), South Africa (67.2Mt), Ukraine (40.9Mt) and Canada (40.3Mt).
Fortescue almost came apart as iron-ore prices tumbled from their 2011 record of above $US190 a metric ton, squeezing margins just as it was ramping up production.
Earlier this year, Fortescue refinanced a few of its debt, accepting an eye-watering 9.75 per cent interest rate on its newest bonds to push out its earliest maturity to 2019 from 2017.
“It’s further encouragement on the costs front from Fortescue”, Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone.
Fortescue, the world’s fourth-biggest iron ore miner, earlier on Thursday unveiled a bigger-than-expected drop in cash production costs over the September quarter to $16.90 a tonne against a fiscal 2016 target of $18.
The miner said its net debt stood at $US6.6 billion at the end of September, from a peak of $US11.3 billion in 2013.
Jefferies LLC analysts said last week.
The spot iron ore price ticked higher overnight, keeping with the choppy trade seen in recent days. BHP and Rio Tinto are also producing more. “If that takes 12 months or 18 months, it doesn’t really matter”.
Iron-ore prices have slumped amid fears that rising supply of the raw material would overwhelm demand as China’s economy slows.
“That will determine steel demand and iron ore demand and price going forward”, he said.
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THE iron ore miner on Thursday reported a one per cent increase in first quarter iron ore shipments and a seventh straight quarter of cost cuts.
