Fortescue has released its March 2018 quarterly production results, reporting iron ore shipments of 38.7 million tonnes (mt) and cash production costs (C1) of US$13.14 per wet metric tonne (wmt). Year to date C1 costs are US$12.43/wmt, equivalent to a C1 cost of US$11.90/wmt after normalising for an assumed exchange rate of US$0.75 and fuel costs of US$53 per barrel (WTI).
Fortescue refinanced its 9.75% Senior Secured Notes during the quarter transitioning the balance sheet to an investment grade structure and reducing annual borrowing costs by US$130 million. Cash on hand at 31 March 2018 was US$2.6 billion inclusive of amounts committed to the repayment of debt and the interim dividend in April 2018. The adjusted cash balance at 31 March 2018 is US$0.6 billion. Net debt at 31 March 2018 reduced to US$3.1 billion from US$3.3 billion at 31 December 2017.
Fortescue Chief Executive Officer, Elizabeth Gaines, said “Our team has continued to deliver by maintaining their focus on safety, production and cost. 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.”
“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.”
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