Fortescue on track for strong FY21

Fortescue Metals Group has posted a jump in iron ore output, helped by the commissioning of its Eliwana mine in December, while wet weather impacted the Pilbara miner’s quarterly shipments.

Fortescue company mined 53.6 million tonnes of ore in the first three months of this year, up from 50mt in the December quarter and 28 per cent on the same time last year, when Fortescue had mined 41.9mt.

That’s despite heavy rainfall during the March quarter, resulting to a 9 per cent decline in shipments.

Fortescue had exported 42.3mt of ore from Port Hedland, compared with 46.4mt in the December quarter.

Its year-to-date shipments, however, stand at 132.9mt – up 2 per cent on the same time in FY20 and positioning the company for a record finish in FY21.

Full-year shipping guidance remains unchanged, with Fortescue estimating between 178mt and 182mt.

Chief executive Elizabeth Gaines said Fortescue’s operational performance, which comes as the iron ore price reached an all-time high of $US200/t on Wednesday, was helped by the commissioning and ramp-up of the company’s Eliwana mine in December.

Fortescue’s newest operation forms part of the company’s Western Hub and is located 140 kilometres west of its Solomon Hub.

“Our focus remains on the ramp up and integration of the Eliwana operation, which is performing well, while continuing to pursue productivity initiatives in ops performance, as well as mining fleet reliability and availability, and rail system capability,” Ms Gaines said in a teleconference this morning.

Fortescue’s cash on hand stood at $US3.6 billion at March 31, following payment of a $US3.5 billion interim dividend and $US909 million spend on capital during the quarter.

The company warned full-year capital expenditure would increase, due to a strengthening Australian dollar and continued work on its Iron Bridge magnetite project.

Fortescue has revised its capex guidance to the $US3.5 billion and $US3.7 billion range (up from $US3-3.4 billion).

Total expenditure year-to-date is $US2.8 billion.

Ms Gaines said the technical review of Iron Bridge, which commenced last year, was expected to complete in late May.

That review recently confirmed a $US400 million cost blowout for the project, which is now estimated to cost $US3 billion.

Production expected to begin in the second half of calendar 2022.

Shares in Fortescue were down 0.3 per cent at 3:15pm AEDT to trade at $22.55.