AUSTRALIA’S Fortescue, the world’s fourth-largest iron ore miner, on Thursday (Oct 24) posted a 4 per cent rise in its first-quarter iron ore shipments but flagged rising costs at its mines while realised prices had fallen, sending its shares to a two-week low.
First-quarter iron ore shipments reached a record high of 47.7 million tonnes, reflecting a ramp-up at its Iron Bridge project in the Pilbara region of Western Australia, which is expected to be producing at full capacity a year from now.
However, Fortescue said its hematite production costs jumped 12 per cent from a year earlier to US$20.16 per wet metric ton (wmt) because it was mining ore with higher ratios of waste rock, while realised prices fell to an average US$83 per dry metric ton (dmt) in the quarter from US$100 a year earlier.
“Overall, a soft 1Q25. Volumes were okay, but higher costs and lower realised prices weighed on the result,” said John Lockton, head of investment strategy at MST Financial.
The miner’s stock fell as much as 3.4 per cent to A$19.09 in early trade, set for its weakest trading session since Oct 8. The broader metals and mining sub-index was trading 1.1 per cent lower.
The miner maintained its outlook for iron ore shipments, its annual cost guidance of US$18.50 to US$19.75 per wmt and said it still expects fiscal 2025 capital spending of between US$3.2 billion and US$3.8 billion for Fortescue Metals.
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Fortescue is currently facing a court case in Western Australia that will determine how much compensation it must pay the Yindjibarndi Ngurra Aboriginal Corporation for mining on their traditional lands without permission.
A Fortescue spokesperson said the company was committed to seeing the matter settled “so all the Yindjibarndi people can benefit”.
“Fortescue has offered compensation to the Yindjibarndi people in the past and we continue to be ready to settle this by paying compensation,” the spokesperson said.
An expert report made public by the court this week found that the miner’s activities at its Solomon Hub had destroyed two sites that could be considered of national significance because they were among the oldest recorded sites of human habitation stretching back on average 53,000 years ago.
That is older than the Juukan Gorge sites, seen around 46,000 years old, which Rio Tinto destroyed in 2020 sparking international condemnation. REUTERS
