Fortescue posts record first quarter iron ore shipments, costs in-line

Fortescue Metals Group said on Thursday iron ore shipments rose 3% to a record level in the first quarter, as the world’s no.4 miner of the steel-making commodity kept a lid on costs even in the face of a tight labour market.

The Australian miner kept direct costs, or C1 costs, at $15.25 per wet metric tonne in the three months to September, in line with the June quarter, but 20% higher than a year ago.

Both Rio Tinto and BHP Group had also flagged labour shortages in their production reports this month.

“Our C1 cost was in line with the previous quarter, reflecting our strong focus on cost management to mitigate inflationary pressures,” Fortescue Chief Executive Officer Elizabeth Gaines said in a statement.

Ore processed and transported by rail also hit first-quarter records, aided by the expanded capacity at Fortescue’s Eliwana mine.

It shipped 45.6 million tonnes (mt) of iron ore in the quarter, compared with 44.3 mt a year earlier and above an RBC Capital Markets estimate of 44.7 mt.

Fortescue also left its fiscal 2022 shipments outlook unchanged at between 180 mt and 185 mt, while Rio trimmed its forecast and BHP posted lower quarterly output.

The miner, which hopes to become a major green energy group, is facing iron ore prices that have nearly halved since hitting record levels in mid-May, hurt by demand concerns arising from a debt crisis in the Chinese property market alongside Beijing’s stricter emissions controls.

(By Sameer Manekar and Nikhil Kurian Nainan; Editing by Devika Syamnath)