Fortescue Metals increases iron ore production by 14%

Fortescue Metals increases iron ore production by 14%

Iron ore giant Fortescue Metals (ASX: FMG) announced that production increased at its Pilbara iron ore mines in Western Australia over the June quarter, despite founder Andrew Forrest in 2015 calling for big miners to cap iron ore production to drive up prices.

FMG mined 47.8 million wet metric tonnes (wmt) of iron ore in the fourth quarter, an increase of 14% from the same time a year ago.

Output also rose from the March quarter to the June quarter.

Exports grew by 3% over the June quarter compared to the same time last year, with 43.4 million wmt of iron ore shipped, including ore from other firms.

The company said it received an average price of US$48.79 per dry metric tonne (dmt) in the quarter, after adjustments for its lower grade iron ore, compared to the average price of $55.66 per dmt for ore with 62% iron content.

FMG stated it was targeting shipments between 165-170 tonnes of iron ore for the 2017 financial year.

In 2014, FMG generated 155 million tonnes of iron ore and shipped 124.4 million tonnes, up by half from the previous year (2013).

The production increases have come despite Andrew Forrest’s calls for big miners to cap production to increase prices.

“I’m absolutely happy to cap my production right now,” said Mr. Forrest in 2015. “All of us should cap our production now and we’ll find the iron ore price will go straight back up to $US70, $US80, $US90.”

Strong iron ore prices helped FMG lower its net debt by $5.2 billion at the end of June this year.

The miner repaid almost $3 billion last financial year.

Nev Power, CEO of FMG said: “Our June quarter result demonstrates the consistent delivery of outstanding operation al performance across all aspects of our business.”