Australia's third largest iron ore producer Fortescue Metals Group Ltd (Fortescue) has announced that in Q1 this year ending March 31 it registered a 15.8 percent quarter-on-quarter fall and an 11.5 percent year-on-year reduction in its shipping volumes, which declined to 8.37 million mt, as the heavy rain across the Pilbara impacted its operations.
In addition, the weather also impacted the company's mining operations. In Q1 this year, Fortescue mined 9.68 million mt of ore - down 12.3 percent quarter on quarter and 6.9 percent year on year, and processed 8.87 million mt of ore - down 7.5 percent quarter on quarter and 1.3 percent year on year.
However, the company predicted that in Q2 it will ship a record 12 million mt as production had been boosted by the completion of its Christmas Creek processing facility in Western Australia. Completion of Christmas Creek will expand production to Fortescue's targeted 55 million mt rate for the full year.
Selling prices increase due to iron ore market strength
Fortescue costs in Q1 rose to $S44.96/mt from $41.5/mt for Q4, partly due to the strong Australian dollar and the reduced tons shipped. The realized average selling price over the period was $162/mt CFR (dry ton), representing an eight percent increase on the previous period, and reflecting the continuing strength of the iron ore market.
Resource portfolio increases to 10 billion mt
In its quarterly report, Fortescue also announced a significant increase in its resource portfolio to over 10 billion mt, with two major maiden resource estimates comprising 1.03 billion mt of Brockman iron formation at Nyidinghu and 625 million mt of both Brockman and Marra Mamba formation within the Western Hub.
In the first three months of 2011, two important operating milestones were achieved with the commencement of wet commissioning of Fortescue's new Christmas Creek ore processing facility and the first ore shipped from Fortescue's Nullagine Iron Ore Joint Venture.