Fortescue Metals Group has recorded higher production costs during the March quarter, while iron ore shipments were down slightly for the period.
Fortescue Metals Group has recorded higher production costs during the March quarterand revised up its full-year costs, while iron ore shipments were down slightly for the period.
The miner’s C1 costs increased from $US12.08 per wet metric tonne last quarter, to $US13.14/wmt in March, representing a 9 per cent rise, with the company blaming production volumes, maintenance, a higher Australian dollar and fuel prices.
The full year C1 cost, based on the original assumptions for exchange rate (US$0.75) and fuel price (US$53/bbl WTI), was forecast to be below US$12.00/wmt.
"After taking into account actual exchange rates and fuel price and the outlook for the remainder of FY18, full year C1 costs are now expected to be in the range of US$12.00 to $12.50/wmt," the company stated.
Fortescue shipped 38.7 million tonnes of iron ore in the March period, down two per cent from the 39.6 mt recorded a year earlier, and also down four per cent on the second-quarter.
The company mined 41.6 mt of ore in the period, down from 44.7 in the same period last year.
Ore processed was also down on the previous corresponding period by 4 per cent at 39.1mt.
The average strip ratio was 1.5 for the quarter with the Chichester Hub at 1.9 and Solomon Hub at 0.9.
Strip ratios in the 2018 financial year are expected to average 1.4.
Chief executive Elizabeth Gaines, said the company was focused on safety, production and costs.
“Our strategic goals of investing in the core long term sustainability of the business while pursuing low cost growth options are firmly in our sights as we continue to generate strong margins, leveraging Fortescue’s position at the lowest end of the global cost curve,” she said.
“During the quarter, we commissioned the first of our autonomous haulage fleet (AHS) at our Christmas Creek operations.
“Together with the relocatable conveyor at Cloudbreak, the ongoing rollout of AHS at the Chichester Hub is set to contribute to further productivity and efficiency improvements across the business.”
Safety performance was in line with the previous quarter with a total recordable injury frequency rate of 3.1 on a rolling 12-month basis.
Fortescue's share price was down 2.35 per cent to $4.57.