PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has tightened its full year export guidance following Tropical Cyclone Veronica, in late March.
The company on Thursday reported that the wet weather conditions resulted in the loss of five days of shipments, equating to some 2.5-million tonnes during the three months ending March.
“This volume impact has seen C1 costs increase to $13.51/t for the quarter. We are now expecting full-year shipments of between 165-million and 170-million tonnes, and C1 costs in the range of $13.00/t and $13.50/t,” said CEO Elizabeth Gaines.
The new guidance estimate compares with the previous guidance of between 165-million and 173-million tonnes, and expected C1 costs of between $12/t and $13/t.
During the three months under review, Fortescue shipped 38.3-million tonnes of ore, including 3.8-million tonnes of West Pilbara Fines.
“The Fortescue team has achieved an excellent result for the March quarter through a continued focus on optimising product mix in a strong market, including the success of our 60.1% iron grade West Pilbara Fines product,” said Gaines.
She noted that building on Fortescue’s integrated operation and marketing strategy, the sustained demand for the company’s products, combined with higher benchmark iron-ore prices, has seen average realised prices increased by 47% to $71/t, compared with the $48/t in the December quarter.
“Long-term contracts for offtake of our 60.1% iron grade West Pilbara Fines product have now been finalised with nine customers, accounting for the majority of the product,” Gaines said.
During the quarter under review, Fortescue also approved the $2.6-billion Iron Bridge magnetite project, which is expected to produce at a rate of 22-million tonnes a year.
“Building on the success of the launch of West Pilbara Fines, the Iron Bridge product will increase our average grade, providing Fortescue with the ability to deliver the majority of our products at greater than 60% iron grade. We are confident the project will deliver growth in earnings and cashflow, resulting in enhanced returns to our shareholders and our joint venture partners through all market cycles.”