MELBOURNE, July 29 (Reuters) - Australia's Fortescue Metals
Group Ltd on Thursday narrowly beat its full-year
estimate for iron ore shipments after a record fourth quarter,
as strong demand from top consumer China offset the impact of
The world's fourth-largest iron ore miner fared better than
rivals Rio Tinto and BHP, whose June quarter
output dropped because of weather disruptions in Western
Despite those disruptions, surging prices of the steelmaking
ingredient and robust demand from China are expected to drive
bumper earnings at miners, with Rio reporting a record
first-half performance on Wednesday.
"Clearly these guys do a good job at managing their
operations," said portfolio manager Andy Forster of Argo
Investments in Sydney.
"They obviously have some capital spending to do going
forward, but given the volume of cash that they are generating
they can all be very generous from a dividend point of view."
Fortescue shipped 49.3 million tonnes (Mt) of ore in the
quarter ended June 30, compared with 47.3 Mt a year ago, edging
past a UBS estimate of 49 Mt.
It reported full-year shipments of 182.2 Mt, above its own
forecast of 178 Mt to 182 Mt, and guided shipments to 180-185 Mt
for fiscal 2022, saying crude steel production outside of China
had largely recovered to pre-COVID levels.
The average price received for iron ore during the quarter
rose to a record $168 per dry metric tonne, realising 84% of the
62% Platts benchmark average, down from 86% in the March
The Perth-based miner's quarterly costs jumped 17% to $15.23
per wet metric tonne (wmt), mainly due to the impact of
inflation and COVID-19 related expenses.
Fortescue is preparing to bring on line its Iron Bridge
magnetite ore project at the end of next year, improving the
grades of its ore.
Cost inflation forced Fortescue to raise capital spending
estimates for the project for the second time this year in May
to $3.3-$3.5 billion, while labour constraints led it to push
back first production to December 2022.
(Reporting by Shashwat Awasthi and Arundhati Dutta in
Bengaluru. Additional reporting by Melanie Burton in Melbourne;
Editing by Maju Samuel and Gerry Doyle)