Fortescue Metals Group is optimistic regarding the completion of its joint venture with Brazil miner and iron producer Vale.
The Australian company said it would soon complete the iron ore JV with Vale thanks to increased commodity prices and a stronger demand for the product from China.
“We’ve completed a lot of laboratory test work and that has been very positive and we are now working on a technical and commercial solution,” the company’s CEO, Nev Power, told Bloomberg Television, adding that he expects to have a completed plan “soon.”
Fortescue is eyeing lower C1 cash costs than competitors Rio Tinto and BHP Billiton, Macquarie Securities analysts said in a note to clients.
Fortescue C1 cash costs could be as low as $12 per “wet” (natural state) metric ton in the next 12 months.
“Today, we are right at the bottom end of the cost curve,” Power said. “That allows us to have very solid cash flow margins even at lower iron ore prices.”