Fortescue recorded iron ore shipments of 47.5 million tonnes in the first quarter of the 2022–23 financial year (FY23), which represents four per cent increase on the prior comparable period and a record for a first quarter.
But increased iron ore production was offset by surging costs over the past year.
The stronger results were driven by increased production at the company’s key operations in Western Australia. However, rising prices of diesel and labour pushed Fortescue’s direct costs 16 per cent higher year-on-year to $17.69 per wet metric tonne. That price represents a three per cent increase on the previous quarter.
Iron ore prices have also taken a hit over the past year, dropping from $US119.65 per tonne in October 2021 to $US87.80 in October this year.
Fortescue has maintained its full-year guidance of shipping between 187 million and 192 million tonnes of ore in FY23.
“Against this backdrop of a strong performance for the first quarter, we are well positioned to meet our guidance, execute on our strategy and ensure all our stakeholders continue to benefit from Fortescue’s success,” Fortescue executive chairman Andrew Forrest said.
The company also used its latest quarterly report to highlight its decarbonisation efforts, with $US6.2 billion ($9.55 billion) in capital investment planned by 2030 to eliminate fossil fuel risks, which it said would save an estimated $US3 billion and rise to annual savings of $US818 million ($1.26 billion) once fully implemented.
“Guided by our unique culture and values, Fortescue is leading the green energy transition and setting record-breaking industry benchmarks,” Forrest said.
“We are establishing the building blocks of a new, global renewable energy value-chain-spanning technology, manufacturing, green energy generation and distribution which will deliver significant returns to our shareholders.”
Fortescue recently announced its formal commitment to exit fossil fuels by 2030, with plans to avoid three million tonnes of CO2 equivalent emissions per year, and supply a carbon-free iron ore product.