Iron Ore Price, page-47

Forrest is adamant the company will not only survive but prosper over the long term, underpinned by the industrialization and urbanization of China and India. “Fortescue is a multi-generational company. It’s made the really tough decisions to ensure that it is.”
While the company has bought itself some breathing room on its debt repayments, it has also moved to aggressively pare its costs. The miner is targeting a C1 cost, or basic production cost, of $18 a tonne in the 2016 financial year, down from $33 a tonne in the first half of the 2014 financial year. Its all-in-cost is expected to fall to $13 a tonne in the 2016 financial year, down from $66 a tonne in the first half of the 2014 financial year. Forrest says “in any iron ore price that the majors can survive at, Fortescue will prosper.”
Fortescue has long been viewed as a leveraged play on China’s development. Forrest claims not to be concerned about the current pace of growth given the focus on development and poverty alleviation by China’s president Xi Jinping, whom he has met a number of times. Forrest believes that Xi will move to develop the country faster than what many experts currently anticipate, and is upbeat about support at the apex of China’s elite politics to the One Belt, One Road strategy aimed at connecting China’s economy to Europe and wider Asia. He is also closely watching India as Prime Minister Narendra Modi pushes ahead with his reform agenda in the world’s second most populous nation.
“My experience with Xi Jinping goes back some time when he was vice president and we had a very frank discussion about what he wanted to achieve. When it become very evident that he was going to be the successor we had an even more frank discussion and he described to me the vision he had of a China without poverty, a China that should not should not suffer a poverty more than any part of the developed world and he took me through how he wanted to achieve that.”
“We’ve set the corporate policy settings of Fortescue on government policy pronouncements. I’m not seeing today anything different from what I saw a decade or so ago and we’re continuing to set Fortescue’s corporate direction on government settings, so we’re listening very closely to India, we’re listening to China.”