PERTH (miningweekly.com) – Iron-ore major Fortescue Metals hopes to cut a further $1.4-billion in costs during 2016, by delivering on improvements in mining productivity and efficiencies.

This target was in addition to the $1.6-billion of total delivered cost savings achieved between 2003 and the end of the 2015 financial year.

Fortescue CEO Nev Power on Thursday said the company had delivered excellent results in all of its key performance measures, including safety, production and costs, during the financial year to June 30.

“Our efficiency and productivity improvements have embedded sustained cost reductions across the business, ensuring strong and consistent cash flows and the foundation for ongoing value creation.”

During the quarter to June 30, some $190-million worth of improvements were achieved in working capital through a reduction in iron-ore inventories.

Fortescue’s C1 cash costs also dropped to $22.16/t for the quarter, down from the $25.90/t reported in the previous quarter. C1 costs of $19/t were reported in the month of June, which was ahead of guidance and provided a solid foundation for Fortescue to deliver on its 2016 C1 cost guidance of $18/t, Power said.

Fortescue further reported a 5% increase in the volume of ore shipped to 42.4-million tonnes for the three months to June 30, compared with the 40.4-million tonnes shipped in the third quarter. 

For the full year, shipments reached 165.4-million tonnes, which was at the higher end of the company’s guidance, and some 33% higher than the previous year.

The miner noted that iron-ore inventories have been drawn down to efficient and sustainable levels, with mining and processing outputs broadly matched to ensure inventory levels remained balanced to support shipments of 165-million tonnes a year on an ongoing basis.

Fortescue had maintained the 165-million-tonne benchmark as its shipping guidance for 2016.