Fortescue ships record tonnes amid surging iron ore prices
Fortescue has smashed through production records, with high iron ore prices suggesting another bumper dividend.
Fortescue Metals group has smashed through its own production records, shipping 178.2 million tonnes of Pilbara iron ore last financial year and saying it realised a bumper average price for its products.
Fortescue released its June quarter production report on Thursday, saying it had easily beaten the 177 million tonne top end of its annual production guidance for the financial year, and shipped a record 47.3m tonnes in the June quarter.
The iron ore major said the pandemic crisis had lifted its production costs by US22c a tonne for the June period, as it lengthened shift rosters and took measures to protect its workforce, with cash production costs of $US13.02 a tonne for the June period and $US12.94.
It had average costs of $US12.94 for the fiscal year ending June 30.
But it said it realised an average $US81 a dry metric tonne for the June period, or 86 per cent of the average benchmark price for iron ore grading 62 per cent, bringing average prices to $US79 a tonne for the financial year.
The strong figures will lift expectations for a big dividend payout when Fortescue delivers its annual financial figures in August. The company finished June with $4.9bn in cash on hand at the end of June, and has a policy of paying out between 50 per cent and 80 per cent of profits to shareholders over the year.
But the coronavirus crisis appears to have lifted costs at one of its new mines, with Fortescue revising the cost of its Eliwana mine and rail project upwards by up to $US100m, to $US1.325bn to $1.375bn on Thursday.
Fortescue chief executive Elizabeth Gaines said the company had lifted its production targets for the current fiscal year on the back of the strong performance, with Fortescue expecting to ship 175 to 180 million tonnes for the year.
Fortescue shares closed Wednesday at $16.85.
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