Fortescue iron ore exports take hit from derailment, weather

Fortescue Ltd., the world’s fourth-biggest iron ore miner, said it expects full-year shipments of the steelmaking material to be at the lower end of its guidance after disruptions at its Western Australian mines.

The company exported 43.3 million tons in its third quarter, down 6% from the year before, due to an ore car derailment and weather disruptions, it said in a production report released Wednesday. Guidance remained unchanged at between 192 million tons and 197 million tons of shipments for the year to June.

Led by billionaire Andrew Forrest, Fortescue has been making headlines in recent years for its string of deals designed to become a major producer of clean fuels and particularly green hydrogen — yet iron ore remains its revenue-earner. Prices of the material, which slumped 29% in the reporting period due to woes in China’s steel-intensive property sector, have rallied this month amid signs an of economic recovery in the Asian powerhouse.

Fortescue entered the higher-grade magnetite iron ore market less than six months ago through development of the Iron Bridge project in Western Australia’s Pilbara region. The higher-quality iron ore, which remains a fraction of its total output, fetched $145 a ton over the period, compared with $104 a ton for its hematite products.

The Perth-based company is working to develop another high-grade asset dubbed the Belinga project in Gabon, where exploration is continuing, it said Wednesday. 

Under a strategy laid out by Forrest, Fortescue is investing 10% of its profits into its Fortescue Future Industries green venture arm. The company’s energy business achieved several milestones in the year’s three months, including opening a facility in Queensland where it will manufacture electrolysers to split water into green hydrogen. 

It’s also seeking to branch out into other metals and minerals, with exploration planned for copper prospects in Australia. Fortescue is set to commence drilling across rare earths projects in Brazil, it said. 

The company said it had $4.1 billion in cash at the end of March, down from $4.7 billion as at Dec. 31.