Fortescue Metals Group shipped record quantities of iron ore in the first three months of 2014, despite posting softer production on the back of seasonal wet weather.
Fortescue Metals Group shipped record quantities of iron ore in the first three months of 2014, despite posting softer production on the back of seasonal wet weather.
The mining giant shipped 31.5 million tonnes of ore during the March quarter, up 5 per cent on the previous three months.
It is the sixth consecutive quarter that FMG has broken its own shipping record and represents a 56 per cent increase on the same period in 2013.
Its quarterly production however fell 8 per cent to 29.6mt, which the company said was largely due to the impact of seasonal wet weather.
That was still enough to lift FMG's annualised production capacity to its target of 155mtpa during the March quarter with the completion of its Kings Valley project last month.
FMG said it remains on track to achieve its 2013-14 shipment guidance of 127mtpa, with the completion of Kings Valley and improving weather expected to drive an increase in shipments in the June quarter to 41.6mt.
The company achieved a realised price of $US107 per dry metric tonne based on an average 62 per cent Platts index price of $US120/dmt in the March quarter.
The iron ore price has fallen from just more than $130 per tonne in the December quarter to a current level of about $115 per tonne, which FMG chief executive Nev Power said was in the middle of its expected range and continued to provide strong margins for the business.
Mr Power, who was one of several Australian business leaders to visit the high-powered Boao Forum last week, said Chinese premier Li Keqiang remained committed to the strong urban development that has fuelled demand for its ore.
"It was very pleasing to hear the confidence expressed by Premier Li in the continued urbanization and industrialization process of the Chinese economy," he told reporters.
"Premier Li stated that the Chinese economy is expected to continue to grow at around 7.5 per cent per annum for the foreseeable future.
"While there was short-term volatility in the March quarter, China’s demand for iron ore remains positive with the government’s commitment to continued urbanization."
The company's C1 costs were 6 per cent higher at $US34.88 per wet metric tonne of ore, in line with the company's guidance of $US34/wmt.
Mr Power said the company's total debt repayments since November last year had reached $US3.1 billion.
He said the company remained on track to achieve a gearing level of 40 per cent but would not put a timeframe on this target, saying it would be achieved when the company's cashflow allowed it.
FMG shares were trading 3.5 cents higher at $5.365 at 12:57pm WST.
