Fortescue FY22 Iron-Ore Shipments Top Upgraded Target — Update

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By Rhiannon Hoyle

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Fortescue Metals Group Ltd. on Thursday said full-year iron-ore shipments rose by 4% to surpass an upgraded annual target, and forecast exports would be relatively steady in the year ahead.

The world’s fourth-largest iron ore producer also highlighted challenges from ongoing inflation pressures and forecast output costs would rise further this fiscal year.

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Fortescue said record fourth-quarter shipments of 49.5 million metric tons took total volumes for the year through June to 189.0 million tons, up from 182.2 million tons a year earlier.

“This was achieved in a challenging operating environment due to the impact of Covid-19 throughout the financial year,” said Chief Executive Elizabeth Gaines.

The miner had only in April raised its forecast for full-year iron-ore exports to between 185 million and 188 million tons–from 180 million-185 million tons–citing a smooth ramp up of the Eliwana project where mining began last year .

Fortescue said it expects to ship between 187 million and 192 million tons of the steel ingredient in the year through June, 2023.

The miner also forecast a further increase in costs during that period, saying it was experiencing inflation pressures being reported industry wide.

Its so-called C1 cost–which reflects the direct costs of mining iron ore, but excludes expenses such as shipping and sustaining capital expenditure–rose by 9% in the fourth quarter from the three months immediately prior because of higher prices for labor , diesel and other consumables.

Full-year costs were up by 14% to $15.91 a ton–within a target band that had also been raised in April–and the company forecast an increase to $18.00-$18.75 a ton in fiscal 2023, excluding any output from its Iron bridge project.

“We remain focused on innovation and productivity to maintain our industry leading cost position and deliver strong operational performance,” Ms. Gaines said.

Fortescue said its fiscal 2023 shipment estimate includes roughly 1 million tons of iron ore from the Iron Bridge site, where first production is scheduled for early next year.

Write to Rhiannon Hoyle at [email protected]


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