News: FMG UPDATE 2-Fortescue to step up energy spending, beats with quarterly record iron ore output

(Adds details on energy division in paragraph 1-5, Iron bridge project in paragraph 10)

MELBOURNE, July 25 (Reuters) -

Australia's Fortescue (FMG) said on Thursday it will step up spending on its energy division to advance several new green hydrogen projects next year, as it beat expectations on record quarterly iron ore production from its mainstay business.

The world's fourth largest iron ore miner has put its green energy and metals business back together after splitting it into separate divisions a year ago amid an exodus of senior management.

Last week, Fortescue said it was unlikely to meet 2030 targets for green hydrogen production due to high power costs in Australia, and announced it would shed up to 4.5% of its global workforce.

But on Thursday, it reaffirmed its commitment to the division, focusing initially on four green hydrogen projects in Australia, the United States, Norway and Brazil. Additional projects in Morocco, Oman, Egypt and Jordan are set to follow next, the company said.

Fortescue plans to boost capital expenditure at its energy division to $500 million and its net operating expenditure to around $700 million next year, up from $300 million and $400-$500 million, respectively, that it had anticipated for 2024.

The miner forecast higher iron ore shipments for fiscal 2025 and posted a 24% sequential rise to record shipments in the fourth quarter.

It now expects to ship between 190 million metric tons (Mt) and 200 Mt of the steel-making commodity in fiscal 2025, up from 191.6 Mt shipped in fiscal 2024.

That compares with Visible Alpha's consensus estimate of 201 Mt shipments, according to a note from Goldman Sachs.

Production in the quarter recovered after a train derailment and weather disruptions in the prior quarter.

Fortescue said it shipped 53.7 million tons (mt) of iron ore in the three months ended June 30, compared with 43.3 Mt in the previous quarter, beating a Visible Alpha's consensus estimate of 51.4 Mt, according to a Morgan Stanley note.

The ramp up to full production capacity at its new Iron Bridge magnetite project is still expected in the September quarter of fiscal 2025, the company said.