Australia's third largest iron ore mine output rose 8% in the second quarter

Australia's third-largest iron ore mine FMG Group said in its quarterly report that in the second quarter of this year, iron ore production increased by 8% year-on-year to 12.38 million tons; iron ore shipments increased by 6% year-on-year to 11.5 million tons. Volume growth lags behind output growth. Although shipments in the third quarter are expected to increase further to 1200-1250 million tons, they are still constrained by port operations.

According to FMG, the average price of iron ore in the second quarter was $158/dry ton (CFR), down from $162/dmt in the previous quarter. Cash costs (C1) including mine production, railway and port operations costs, and operating lease costs totaled $53.23 per ton.

It is said that BHP Billiton will announce the second quarter report this week and it is expected that the output will also increase. Last week, Rio Tinto announced that its output in the second quarter increased by 12% year-on-year to 49 million tons, and it is expected to reach 244 million tons in the whole year.

FMG is accelerating its 155-million-ton production expansion and continuously improving its productivity. By the end of June, production and shipment data have exceeded the annual production target of 55 million tons. In June, the output was equivalent to 60 million tons of production per year. At present, most of FMG's iron ore is sold to China, but it is expected that exports to non-China production will account for 25% of total exports in the next few years.

NevPower, who had just replaced FMG founder Andrew Forrest as chief executive, reiterated that it is expected that the global iron ore price may fall back from high levels after 3-5 years as supply and demand tend to balance.