Fortescue CEO Elizabeth Gaines
PERTH (miningweekly.com) – Iron-ore major Fortescue Metals’ optimised product strategy has delivered results in the three months to September, with the miner reporting higher average realised prices for its product.
The company, which has been hit by a shift from Chinese steel mills to higher grade iron-ore, on Thursday reported a 12.5% quarter-on-quarter increase in the average realised price during the September quarter to $45/t.
“The Fortescue team have delivered a strong start to the 2019 financial year, with shipments of 40.2-million tonnes for the quarter, an increase in the realised price to $45/t through our optimised product strategy, and C1 costs of $13.19/t,” said CEO Elizabeth Gaines.
“Shipments of our 60.1% iron grade product, West Pilbara Fines (WPF), are scheduled to commence from December this year, further enhancing our product mix.”
The miner is expected to deliver between five-million and ten-million tonnes of WPF in the second half of 2019.
Gaines noted that following record shipments in the last quarter of the 2018 financial year, Fortescue has rebuilt its iron-ore inventories and prepared new areas for mining, which increased total material moved by 11% during the quarter under review.
Finished product and run-of-mine inventories increased by 6.7-million tonnes over the quarter, which combined with the increased overburden removal, will provide Fortescue with the flexibility to manage production and capitalise on market conditions, Gaines said.
Meanwhile, she said that the development of the Eliwana mine and rail project was progressing.
The Fortescue board earlier approved the $1.27-billion development of Eliwana, which would entail a new 30-million-tonne-a-year dry ore processing facility and infrastructure, as well as a 143 km rail line. Production is expected to start in December 2020, and the mine will introduce a 60% iron-grade product into Fortescue’s portfolio by the second half of 2019.
Once completed, the Eliwana project would increase Fortescue’s WPF production to 40-million tonnes a year.
Looking at the 2019 financial year, Fortescue is predicting total iron-ore shipments of between 165-million and 173-million.