Fortescue raises annual shipments view, hikes cost estimate for key project

The brand of Fortescue Metals Group adorns their headquarters in Perth, Australia, November 11, 2015. REUTERS/David Grey

April 28 (Reuters) – Fortescue Metals Group (FMG.AX) raised its full-year iron ore shipments forecast on Thursday helped by a manufacturing ramp-up at Eliwana operations, whereas growing capital estimate for its key Iron Bridge Magnetite venture in Western Australia.

The world’s fourth-largest iron ore miner now expects to ship between 185 million tonnes (mt) and 188 mt of the commodity in fiscal 2022, up from a earlier steering of 180 mt to 185 mt. Shares of the corporate rose 3.5% to A$20.81 in early buying and selling.

The Iron Bridge venture, which is essential to Fortescue’s progress technique, has confronted a number of points since its announcement, together with the exit of its chief working officer Greg Lilleyman and two different executives after a assessment final 12 months.

Magnetite iron ore initiatives are notoriously troublesome to develop. For instance, China’s CITIC Pacific Sino Iron venture in Western Australia arrived years late and billions of {dollars} over price range.

After a number of value revisions, Fortescue mentioned the capital estimate for the Iron Bridge venture has now been elevated to $3.6 billion-$3.8 billion from $3.3 billion-$3.5 billion.

Coronavirus-related labour constraints additionally noticed workforce ranges considerably beneath the Iron Bridge venture’s plan for the quarter, Fortescue mentioned.

The corporate, run by billionaire Andrew Forrest, shipped 46.5 mt of iron ore within the March quarter, in contrast with 42.3 mt a 12 months earlier and beating an estimate of 46 mt from UBS. Prices had been greater as a result of market inflation throughout key enter prices and labour charges.

The Eliwana venture within the Pilbara area of Australia has seen a ramp-up in manufacturing ever since first ore was processed in December 2020.

Fortescue raised its annual prices steering to $15.75-$16.00 per moist metric tonne (wmt) from $15.00-$15.50/wmt, reflecting up to date crude oil value assumptions and Australian greenback alternate charge.

Larger rivals BHP Group (BHP.AX) and Rio Tinto (RIO.AX) have warned of dangers to manufacturing from labour shortages and provide chain disruptions exacerbated by the pandemic, sustained excessive inflation, and a chronic Russia-Ukraine conflict. learn extra

Reporting by Harish Sridharan and Riya Sharma in Bengaluru; Modifying by Krishna Chandra Eluri, Sriraj Kalluvila and Subhranshu Sahu

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