Fortescue Metals Group, the Western Australia-based iron ore miner has once again come out fighting, announcing record earnings.
It seems Fortescue can’t put a foot wrong at the moment as they push ahead with expansion plans and simultaneously pay down debt.
Fortescue Metals announced record half-year profits which were attributable to cost-cutting measures and expansion plans. This seems to have helped boost the performance of the innovative mining company led by Andrew ‘Twiggy’ Forrest.
” 77 per cent rise in earnings”
The group saw its earnings after expenses more than triple, climbing from US$478 million (AUD$532 million) in the six months to December 2012 to US$1.7 billion at the end of 2013. As each year passes, Fortescue continue to buck the trend and have recorded a 77 per cent rise in earnings from their iron ore mining activities in the Pilbara.
Lean and profitable mining operations for Fortescue
Fortescue runs a lean and profitable iron ore mining operation in Western Australia’s Pilbara region. They operate mines in what they call the ‘Chichester Hub’ which is roughly the size of France.
The Fortescue mining operation is split into two distinct areas, the Solomon and Chichester Hubs. Each hub has two mines, Firetail and Kings mine in the Solomon Hub and Cloudbreak and Christmas Creek mine in the Chichester Hub.
The Chichester hub is about 263km south of Port Hedland and 150km north of Newman and the Solomon Hub is located 120km west of the Chichester Hub.
“300km network of purpose built railways”
The mammoth mining projects are situated North of Tom Price, Newman and Parabardoo and are interlinked with a 300km network of purpose-built railways to transport the iron ore between the mines and on to Herb Elliot Port.
Fortescue productivity gains reap financial rewards
Chief executive Nev Power†said the results were indicative of Fortescue`s approach to improving capacity and pushing forward with productivity gains.
He went on to say, “The ongoing strong demand for our products has allowed us to accelerate debt repayment, de-risk the balance sheet and increase returns to our shareholders.
“Shipments jumped a massive 51 per cent”
Seen as the world`s fourth-largest iron ore miner, Fortescue were helped along by strong iron ore prices in the second half of 2013. Shipments jumped a massive 51 per cent when compared with last year’s figures.
According to Fortescue, it’s on target to deliver 155 million tonnes of iron ore by March this year – this is an annual figure. Fortescue has maintained its target of 127 million tonnes this year.
“strong steel and imported iron ore demand”
Despite the likelihood of iron ore price fluctuations,† Mr Power estimated iron ore prices will average between $US110†and $US120 per tonne this year.
According to Mr.Powers, there is new supply coming into the market, although most of that has been absorbed by strong steel and imported iron ore demand.