Fortescue Metals Group has made a habit of breaking records, achieving a new marker for iron ore shipments in the first quarter of the 2022–23 financial year (FY23). And that’s not the only surprise that came out of its latest quarterly.
The major miner shipped 47.5 million tonnes (Mt) of iron ore across the three months, representing a four per cent jump on the September quarter of 2021.
But increased iron ore production was offset by surging costs over the past year.
Rising prices of diesel and labour pushed Fortescue’s direct costs 16 per cent higher year-on-year to $17.69 per wet metric tonne. That price represents a three per cent increase on the previous quarter.
Iron ore prices have also taken a hit over the past year, dropping from $US119.65 per tonne in October 2021 to $US87.80 in October this year.
Fortescue has maintained its full-year guidance of shipping between 187 million and 192 million tonnes of iron ore in FY23.
“Against this backdrop of a strong performance for the first quarter, we are well positioned to meet our guidance, execute on our strategy and ensure all our stakeholders continue to benefit from Fortescue’s success,” Fortescue executive chairman Andrew Forrest said.
The company also used its latest quarterly report to highlight its decarbonisation efforts, with $US6.2 billion in capital investment planned by 2030 to eliminate fossil fuel risks, which it said would save an estimated $US3 billion and rise to annual savings of $US818 million once fully implemented.
“Guided by our unique culture and values, Fortescue is leading the green energy transition and setting record-breaking industry benchmarks,” Forrest said.
“We are establishing the building blocks of a new, global renewable energy value-chain-spanning technology, manufacturing, green energy generation and distribution which will deliver significant returns to our shareholders.”
This could include mining minerals essential to the renewable energy transition, including lithium.
Asked how its green energy arm Fortescue Future Industries (FFI) would access the battery metals it requires, Forrest said Fortescue would be responsible for any mining that takes place.
“Fortescue Metals Group is a fantastic explorer and developer but also acquirer of assets and, as you’ve heard us say in the past, we will be taking responsibility as a mining and exploration company without many peers in success to deliver the battery metals and the future facing metals which FFI needs,” he said.
“The beauty of FFI is that it gives us a really clear view into the future of what (minerals) are going to be required by when.”