PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has halved its capital expenditure (capex) expectations for the 2015 financial year from $1.3-billion to $650-million.
The miner said on Friday that the reduction in planned capex spend for 2015 was consistent with Fortescue’s ongoing focus on delivering operational efficiencies and reducing costs in order to maximise shareholder value.
“In addition to our focus on safety, efficiency and lowering costs, our objective is to produce superior shareholder returns. In this current environment, it is prudent to defer investing additional capital that increases supply into the market,” CEO Nev Power said.
The $650-million capital save would be obtained through the re-engineering of dewatering requirements, a reduction in exploration, the deferral of the detrital processing plant at the Solomon hub, in Western Australia, as well as the reduction and deferral of operational capex.
Furthermore, Fortescue would implement efficiencies in the construction of its Anderson Point berth 5.
The company said that given the advanced stage of the development of this berth, work would continue to complete the project, which remained on schedule for commissioning in March next year.
The company would also continue with orders for very large ore carrier ships, but would investigate alternative ownership and funding options for these vessels.
“We will maximise output from our world-class mining and infrastructure assets, and remain focused on factors within our control to ensure the efficiency of operations, and [on] cash discipline to continue the programme of early, voluntary debt repayment,” Power added.
He noted that the reduction in capital would improve 2015 operating cash flows while maintaining the production guidance of between 155-million and 160-million tonnes shipped.
Power added that the deferred projects would restart if market conditions improved.