Australian iron ore miner Fortescue Metals Group announced on July 15 that in the second quarter of 2010 its iron ore shipments totaled 11.04 million metric tons, increasing by 13 percent quarter on quarter and up 36 percent as compared to the corresponding period of 2009, as production increased in order to benefit from higher prices and demand from steel mills.
The average price for the second quarter was approximately US$130/dwt delivered to China.
This substantial increase in selling price bolstered revenues, and cash on hand at the end of June was US$1.24 billion, representing an increase of around US$500 million from the end of March this year.
Total iron ore mined across the two mining areas, Cloudbreak and Christmas Creek, increased by 10 percent over the previous quarter and was up by 28 percent in comparison to the same period last year, Fortescue said. The relative contributions of the two mines were 9.29 million metric tons from Cloudbreak and 2.10 million metric tons from Christmas Creek, providing for a total quarterly result of 11.4 million metric tons across the Chichester Hub.
Total ore processed during the second quarter was up 17 percent to 10.5 million metric tons, which was an effective annualized run rate of 42 million metric tons per year.
Fortescue plans to expand annual production from its Chichester operation to 55 million metric tons by 2011, and may start work on the $9 billion Solomon project in the first quarter next year.
Fortescue also noted that in the third quarter of 2010 production will be impacted by two major scheduled maintenance activities.
In a separate release, Fortescue announced that it has increased the total resource estimate for the Solomon project to 2.86 billion metric tons from 2.7 billion metric tons.