Fortescue Metals Group reported record iron ore shipments for the nine months to March 2025, alongside strategic acquisitions and progress in green energy projects.
- Record 143.2 million tonnes iron ore shipments in nine months to March 2025
- Hematite production cost reduced to US$17.53 per wet tonne
- Acquisition of Hawk Iron Ore Project integrated into Life Mine Plan
- First shipment of T Power Zero System marks green energy milestone
- Cash balance of US$3.3 billion after US$1 billion interim dividend payment
Record Production and Shipments
Fortescue Metals Group has delivered a strong operational performance in the nine months to March 31, 2025, reporting record iron ore shipments of 143.2 million tonnes. While third quarter shipments of 46.1 million tonnes were slightly down 7% on the previous quarter, they still represent a 6% increase compared to the same period last year. This steady output underscores Fortescue's resilience amid challenging weather disruptions and supply chain interruptions, particularly at the Port of Hedland.
Cost Efficiency and Financial Position
The company achieved a notable reduction in hematite production costs, with the C1 cost falling to US$17.53 per wet metric tonne, down 4% from the previous quarter and 7% year-on-year. This improvement was driven by favourable exchange rates, operational efficiencies, and a lower strip ratio. Fortescue's financial position remains robust, with a cash balance of US$3.3 billion and net debt of US$2.1 billion after paying a US$1 billion interim dividend and investing US$1 billion in capital expenditure during the quarter.
Strategic Acquisition and Integration
In a significant strategic move, Fortescue completed the acquisition of the Hawk Iron Ore Project from Red Mining Limited for A$254 million. This asset has been successfully integrated into Fortescue’s Life Mine Plan, enhancing the company’s operational flexibility and long-term resource base in the Pilbara region. The acquisition aligns with Fortescue’s ongoing strategy to optimise its iron ore portfolio and secure future production growth.
Advancing Green Energy Initiatives
Fortescue’s green energy division marked a milestone with the first production and shipment of the T Power Zero System to Liebherr in the United Kingdom. This innovative technology, developed in partnership with Formula E Championship, highlights Fortescue’s commitment to decarbonisation and sustainable mining practices. The company is also reassessing timelines for its broader green energy project pipeline, including developments in Norway, Brazil, and Australia, to better align with evolving global market conditions and policy environments.
Outlook and Guidance
Fortescue has maintained its full-year guidance for FY25, expecting iron ore shipments between 190 and 200 million tonnes and capital expenditure in the range of US$3.5 to US$3.8 billion. The company continues to focus on safety, reporting an improved Total Recordable Injury Frequency Rate (TRIFR) of 1.1 for the 12 months to March 2025, reflecting ongoing efforts to prioritise workforce wellbeing amid operational demands.
Bottom Line?
Fortescue’s strong production and strategic moves set the stage for sustained growth amid evolving market and energy landscapes.
Questions in the middle?
- How will integration of the Hawk Iron Ore Project impact Fortescue’s long-term production profile?
- What are the implications of the reassessed green energy project timelines on Fortescue’s decarbonisation goals?
- How might ongoing weather and supply chain challenges affect shipment volumes in the coming quarters?