FMG Quarterly

Fortescue’s strong operational performance continued in the December 2014 quarter with C1 costs decreasing by 11 per cent to US$28.48 per wet metric tonne (wmt). During the quarter shipments remained steady at 41.1 million tonnes (mt), an annualised rate of 164mt per annum. Sustainable cost reductions result in C1 guidance for the second half of FY15 being revised down to US$25-26/wmt reflecting the improvement in operating performance, foreign exchange rate and fuel price. This operating performance continues to generate.

Fortescue’s strong operational performance continued in the December 2014 quarter with C1 costs decreasing by 11 per cent to US$28.48 per wet metric tonne (wmt). During the quarter shipments remained steady at 41.1 million tonnes (mt), an annualised rate of 164mt per annum. Sustainable cost reductions result in C1 guidance for the second half of FY15 being revised down to US$25-26/wmt reflecting the improvement in operating performance, foreign exchange rate and fuel price. This operating performance continues to generate positive cash margins supporting a strong and secure balance sheet.

Highlights:

41.1mt shipped for the December 2014 quarter, 164 million tonnes per annum (mtpa) •
US$28.48/wmt C1 cost, a further 11 per cent improvement from the prior quarter •
US$25-26/wmt C1 cost guidance for second half FY15 •
US$41/wmt total delivered cost for the quarter reducing to US$35/wmt based on second half guidance (including C1, shipping, royalties and overhead costs) •
Realised price (CFR) US$63/dry metric tonne (dmt) from an average 62% Platts CFR index of US$74/dmt •
Capital guidance halved to US$650 million with a focus on working capital and cash management •
Cash on hand at 31 December 2014 was US$1.6 billion •
US$500 million voluntary debt repayment completed during the quarter reducing gross debt to US$9.1 billion