Record for FMG as it ramps up spending on green projects in 2022
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Fortescue Metals Group (ASX:FMG) has powered to a new financial year record for iron ore sales, beating guidance to ship 182.2Mt of the bulk commodity in 2021.
That came on the back of a record 49.3Mt of iron ore shipments in the June Quarter.
Prices also came in at a record average of US$168 per dry metric tonne in June and US$135/dmt for FY21 at cash costs of US$15.23 per wet metric tonne for the quarter and US$13.93/wmt for the year.
FMG realised 84% of the Platts 62% CFR index, which hit a record quarterly average level of just over US$200/t. That was not a bad result for the company, which has historically had to weather discounts for the lower grade fines produced at its Pilbara iron ore operations.
If it meets the upper end of its FY22 guidance of 180-185Mt at $15/t it could break its record again next year.
After beating consensus estimates on net cash at US$2.7 billion FMG will spend US$2.8-3.2b on capex in 2022.
The company expects ramp up its funding of its green energy arm Fortescue Future Industries from US$120 million in 2021 to US$400-600 million in 2022, having met a number of “stretch targets” by June 30 this year.
On the project development front early works have started at the US$3.3-3.5b Iron Bridge Magnetite Mine, expected to add 22Mtpa of high grade concentrate to FMG’s production profile after its ramp begins in December 2022.
However, China’s Baosteel has dropped its 12% stake in 69% shareholder FMG Magnetite, giving Fortescue full control of the majority owner of the project (the other 31% is held by Formosa Steel).
FMG was not the only iron ore company enjoying the boost of record prices and demand out of China in the June quarter.
Champion Iron (ASX:CIA) produces 7.5Mtpa of a premium 66.5% concentrate at its Bloom Lake mine in Quebec, Canada, that gets it paid well over the benchmark price for its iron ore.
It received a record C$545.4 on 1.94Mt of magnetite concentrate in the June quarter at a crazy price of C$279.70/dmt (US$232.30/t) and margins of C$203.60/dmt.
That is a rise of 71% and 118%, respectively.
Those results drove its EBITDA and earnings per share to records of C$405.7m and 0.44cps.