Fortescue takes measures in response to iron ore market volatility

Australia-based miner Fortescue Metals has announced that it has taken decisive action to secure the profitability and liquidity of the company in response to volatile market conditions and uncertainty over future iron ore prices.
 
Fortescue stated that it will defer the development of the Kings deposit within the Solomon mining hub and the full completion of its fourth berth at Herb Elliott Port until iron ore prices return to more sustainable levels. However, the expansion of the company's Christmas Creek mine, commissioning of the low-cost Firetail deposit at the Solomon mine and port and rail projects will continue to reach the near-term growth target of 115 million mt per year.
 
Following these measures, the production guidance for the financial year 2012-13 will decline to 82-84 million mt per year from the previous guidance of 86.5 million mt per year. Meanwhile, Fortescue's capital expenditure guidance for the financial year is revised to US$4.6 billion from the company's previous estimate of US$6.2 billion. The company also plans to reduce staff numbers and operating costs to save approximately US$300 million.