Billionaire Andrew “Twiggy” Forrest’s Fortescue Metals has achieved its target on cutting the cost of digging up ore earlier than expected.
In its December quarter production report, the pure play iron ore miner put the cost per wet metric tonne at $US12.54, down 7% on the previous quarter and 21% over 12 months.
This hits ratings agency S&P’s exceptions for Fortescue of between US$12 and $US13 by the end of the 2017 financial year.
A short time ago Fortescue shares were up 0.46% to $6.51, a positive beacon in a sea of red from a falling market.
CEO Nev Power says December was the company’s 12th quarter in a row to cut costs.
“Our strong operating results together with positive market conditions have generated excellent cash flow,” he says.
The company has been quickly cutting debt, slicing off another $1 billion in December, reducing what it owes to about $4 billion.
Fortescue’s average realised price was $US64.87 a tonne for the quarter.
Total ore shipped for the quarter was 42.2 million tonnes, steady on last year.
The December quarter production numbers from Fortescue:
The company still expects to hit its full year ore shipment guidance of 165 to 170 million tonnes.
Fortescue, which like other miners has been benefiting from rising commodity prices, is due to announce its half year results on February 22.