Fortescue Metals Group is exploring new sales avenues for its iron ore after inking a preliminary deal with Australian technology company GLX Digital to trial its GLX Connect trading platform.
GLX Connect is the same digital system that Pilbara Minerals has been using with success for the sale of spodumene concentrate produced from its Pilgangoora lithium-tantalum operation in Western Australia.
Iron ore has not ordinarily been sold through a spot market, with the industry traditionally suited to seaborne trade given the large volumes of product being sold and shipped.
E-auctions have been conducted in India this year, with Goa’s Directorate of Mines and Geology selling iron ore on a spot market.
The Goa Government found that iron ore stockpiled at various mines, plots and jetties throughout the state could be sold via an e-auction to generate revenue for the state.
A Fortescue spokesperson indicated the company’s agreement with GLX would not impact any of its existing seaborne arrangements, nor affect the iron ore price considerably.
“Fortescue is exploring the potential to trial new platforms to complement our existing sales and marketing channels,” the spokesperson said.
“The majority of Fortescue’s products will continue to be sold via existing contractual seaborne arrangements, as well as our portside sales entity FMG Trading Shanghai.”
Across the first three auctions on Pilbara Minerals’ Battery Material Exchange (BMX), the company’s spodumene concentrate drew highest bids of $US1250 ($1684.5)/dry metric tonne (dmt), $US2240/dmt and $US2350/dmt respectively.
Attracting 25 bids online during a 45-minute auction window, the third auction saw a cargo of 10,000dmt sold at a target grade of 5.5 per cent lithia.
Fortescue’s share price closed at $17.60 on Monday. The company achieved record iron ore shipments of 45.6 million tonnes for the September quarter as the company maintained a low cost profile during the three-month period.
The Perth-based company mined 60.8 million tonnes of iron ore for the quarter at C1 costs of $US15.25 ($20.22)/wet metric tonne, while 48.4 million tonnes of iron ore was processed across the same timeframe.
Its record first quarter iron ore shipment figures were three per cent higher than the first quarter of the 2021 financial year, but down on the 49.3 million tonnes shipped in the June quarter of 2021.