Fortescue To Review New Projects

Miner Blames Super Tax

Australian iron ore miner Fortescue Metals Group Ltd. has put two of its three expansion projects on hold.

The company has said that it wants to review the potential impact of the 40% tax on mining profits proposed by the Australian government. The tax is due to come into force in July 2012

Fortescue is to review its US9billion Solomon hub and its $6billion Western hub projects. Between them the two projects were set to employ up to 30,000 people.

"The uncertainty in the financial markets caused by the proposed tax and the cash impost that RSPT payments will place on future business revenues has necessitated an urgent review of the economics surrounding the development of Fortescue's major projects," the miner said in a statement on Wednesday.

The company had been aiming to approve Solomon next year but the only work to continue will be the completion of existing studies.

The project was slated to produce 160 million tonnes a year of iron ore.

However Fortescue continues to expand its Chichester hub capacity from 55 million tonnes to 95 million tonnes a year. Unlike the Solomon and Western projects, Chichester is to be financed from internal cash flows.

Fortescue To Pay Millions In Compensation

UK Shipping Contractor Awarded $78 million

The High Court in London has ordered Australian iron ore miner Fortescue Metals Group to pay a shipping contractor $US78 million in compensation after losing a court battle.

The court heard that Fortescue suspended a number of shipping charter contracts in 2008 at the time of the global financial crisis, including one with UK company, Zodiac Maritime. Zodiac took the matter to the British High Court and was awarded $78 million in damages yesterday.

"The litigation commenced when Fortescue suspended a number of charter contracts in 2008 due to turmoil in international freight and iron ore markets," Fortescue said in a statement on Thursday.

"Other shipping contracts that were in dispute were renegotiated and settled prior to any court hearing," the company said.

FMG also said it had included $21 million for the claim in its half-year accounts and the remaining $62 million would be factored into the full-year results.

New Fortescue Iron Ore Project To Cost $9 Billion

Australian iron ore miner, Fortescue Metals Group has delivered an upbeat assessment on the current iron ore market. In a presentation to investors in New York, CEO Andrew Forrest said he sees prices strengthening as China's ability to meet its own iron ore requirements declining fast.

Fortescue also gave an update on its operations in Western Australia where production is currently running at 40 million tonnes a year. The company is aiming to increase this to 55 million tonnes within the next 12 months.

The company’s feasibility study for its 60 million tonne a year Solomon operation is nearing completion. Capital expenditure on the project was likely to total $8.9 billion with $3.2 billion on the first stage and with a second stage to add an extra 100 million tonnes a year costing about $5.7bn.

Fortescue also indicated it envisaged a third rail hub linking the company's planned magnetite mining operations to the new Anketell Point port south-west of Port Hedland in WA.

Fortescue and Aquila Resources Ltd are driving plans for the new port, a short distance from Rio Tinto Ltd's major export port at Dampier.

The West Australian government gave the proposal the green light last week and has offered to contribute $3.5 million to its construction, which is expected to cost several billion dollars.

West Australia Identifies Deepwater Iron Ore Port

Western Australia, producer of 70 percent of the country’s exports to China, has identified a new deepwater port that may be used for iron ore exports from the Pilbara region.

The port is at Anketell, 30 kilometres (19 miles) east of Karratha and the government says it could be used by Fortescue Metals Group Ltd., China Metallurgical Group Corp. and API Management Pty Ltd.

Operations at the Anketell port may start by 2015, Western Australian Premier Colin Barnett said. Mr Barnett suggested that Fortescue’s Solomon mine, China Metallurgical’s Cape Lambert project and API’s West Pilbara Iron Ore mine could become “foundation investors” in the port.

Profits Fall At Fortescue Metals

Underlying first half profit at Australian iron ore producer, Fortescue Metals Group, fell in the first half of the year to $98 million, down from US$164 million in the previous corresponding period. Figures were affected by the revaluation of the Leucadia loan note, which resulted in a negative adjustment of US$55 million against a boost of US$1.4 billion in the previous year, however the fall was also due to lower average realised prices during the half, which fell to US$57.22 per dry metric ton from US$71.65 in the previous comparable period.

Revenue for the half year rose 17% on year to US$1.19 billion from a restated US$1.01 billion a year earlier. Earnings before interest, tax, depreciation and amortization were US$426 million for the half year ended Dec. 31, down from US$479 million a year earlier. The company isn't paying an interim dividend.

Fortescue also announced that it has pushed back expansion plans for its port and iron ore operations in the Pilbara region of Western Australia although it said that the date could be brought forward again if it sought external funding. The company had aimed for an annualised rate of 95 million tons a year from February 2012; it now aims for 92 million tons a year from April 2013.

Fortescue Sales Up 44 Per Cent In Second Quarter

Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, said second-quarter shipments jumped 44 percent on record demand from Chinese mills.

Shipments reached 9.1 million metric tons in the three months ended Dec. 31, from the 6.3 million tons a year earlier, Perth-based Fortescue said today in a regulatory statement. That’s below a UBS AG estimate of 9.5 million tons.

Rio Tinto Group, Australia’s biggest exporter, had record sales from its Pilbara mines last quarter as demand surged from China, the world’s biggest buyer. Contract iron ore prices may jump 50 percent this year, according to forecasts by Nomura Holdings Inc. and Bank of America Merrill Lynch.

“There are a wide variety of independent market forecasts for the benchmark, ranging from an increase of between 25 percent, up to 50 percent,” Fortescue said in the statement.

Fortescue declined 2.9 percent to A$4.99 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The stock has jumped 12 percent this year as cash prices for iron ore for immediate delivery rose to their highest in at least 13 months.

Steelmakers in Japan and South Korea last year won a 33 percent price cut for annual prices from suppliers including Rio Tinto. Chinese steelmakers didn’t reach an agreement after failing to persuade miners to offer a bigger reduction.

No Settlement

“It also remains a possibility that, as per the previous contract year, there will not be a benchmark agreed for China in the next contract year beginning April 1, 2010,” Fortescue said today without elaborating.

The company is seeking to widen its customer base outside of China and has shipped its first cargo to a non-Chinese Asian buyer, Fortescue said today. In October, the iron ore producer said it was in talks to sell to South Korean and Japanese mills.

“It is one of the major mills of Asia, and a name widely respected in the industry,” Executive Director Russell Scrimshaw told reporters today on a conference call. “This particular customer, I am certain, will be the first of several who are coming along behind them.”

Fortescue failed last year to complete a planned $6 billion funding deal with Chinese lenders as it sought financing to expand operations to more than double exports by 2012.

The company is seeking to ship about 40 million tons this year prior to an expansion in 2011 which will boost capacity to 55 million tons a year, it said. Production costs in the quarter increased to $27.43 a ton from $26.60 a ton, the company said.

Fortescue had cash of $706 million at the end of December, up from $704 million at the end of the previous quarter, Chief Financial Officer Fiona Barclay said on the call.

Source: Bloomberg

Fortescue In Talks With Japan, Korea

Fortescue Metals Group Ltd., Australia’s third-biggest iron ore exporter, is in talks to sell to Japanese and Korean mills for the first time as it seeks to take market share from Rio Tinto Group and BHP Billiton Ltd.

“We’ve been in active discussions with them,” Executive Director Graeme Rowley said today in an interview. As “contracts come up for renewal I would expect that they will come and talk very positively with us about us joining in their supply chain,” he said, without further identifying the mills.

Fortescue, which started its A$2.8 billion ($2.6 billion) project last May, has sold all the ore produced to steel mills in China, the world’s biggest buyers. The mills it’s talking to have contracts to buy ore from Rio and BHP, Australia’s two largest exporters, Rowley said.

Fortescue, controlled by billionaire Andrew Forrest, rose 2 percent to A$4.17 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The Perth-based company has more than doubled in market value this year to A$13 billion. It plans to boost capacity by the end of next year with a A$360 million expansion of its Christmas Creek mine.

The company will “largely” finance expansion plans by itself to bring production up to 95 million metric tons a year after failing to agree on terms for $6 billion in funding from China, Forrest said last week. Expansion of Christmas Creek will take total capacity to 55 million metric tons by the end of 2010, Rowley said today.

China’s demand for iron ore means it would likely play a more dominant role in pricing iron ore over time, Rowley said, adding that he supported efforts to change the annual contract period to the calendar year.

“A January 1 price date is eminently sensible,” he said. “The April 1 was based around the Japanese financial year.”

Source: Bloomberg

See also: Fortescue posts Q3 loss

China Seeks To Break New Ground With Fortescue Deal

China, planning to bankroll a $6 billion iron ore expansion of Fortescue Metals Group Ltd. in Australia, is poised to make further investments to help break the “stranglehold” of the world’s three-largest exporters.

“The Chinese steel mills are trying to dilute the concentration of iron ore supply,” said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. “They will be looking for more deals like this.”

China, the world’s biggest buyer of the ore, has invested in $56 billion of projects globally to try to reduce dependence on Vale SA, Rio Tinto Group and BHP Billiton Ltd., which control two-thirds of seaborne supply. The nation yesterday scaled back contract price demands together with the Fortescue deal after seven months of stalled talks.

The Chinese “are very keen to see supply away from BHP, Rio and Vale grow,” said Tim Schroeders, who helps manage A$1.1 billion ($904 million) in stocks at Pengana Capital Ltd. in Melbourne, including the three biggest producers. They would want to “lessen the stranglehold, or perceived stranglehold, that the big three have,” he said.

Fortescue, Australia’s third-largest iron ore exporter, fell 3.9 percent to A$4.40 at the 4:10 p.m. Sydney time close on the Australian stock exchange, giving it a market value of A$13.6 billion. The stock has more than doubled this year as a rebound in demand in China boosted ore cash prices by about 46 percent.

Chinese lenders will arrange between $5.5 billion to $6 billion of financing for Fortescue, in which China’s Hunan Valin Iron & Steel Group has a stake, as part of a sales price accord, the Perth-based company said yesterday. Most of the money will be used to expand production, Fortescue Chief Executive Officer Andrew Forrest said yesterday on a conference call.

“Fortescue and China are hoping the miner has the potential to break the duopoly of BHP and Rio” for Australian iron ore, said Zhou Xizeng, a Beijing-based analyst with Citic Securities Co. BHP and Rio are the two biggest producers in Australia, itself the biggest exporter of the ore.

Fortescue, which had delayed expanding its iron mine amid a cash squeeze and a slump in demand, plans to increase capacity to 95 million metric tons by 2012, Chief Financial Officer Michael Minosora said last week, from current capacity of about 45 million tons. It had cash of $654 million and debt of $2.8 billion at June 30, according to company filings.

“The Chinese aren’t there for next year, they’re not there for the year after, they’re there for the next 10 to 20 years,” said James Wilson, a resources analyst at DJ Carmichael & Co. in Perth. “Fortescue has its own infrastructure, its own port facilities, it’s ramping up production. There’s a great case for investment there.”

China bought record volumes of ore in July as the government’s 4 trillion yuan ($585 billion) stimulus package spurs demand for steel in construction, automobiles and washing machines. China may spend more than $500 billion on foreign resource investments over the next eight years, according to Deloitte Touche Tohmatsu.

China’s drive to secure ore production was set back in June when Rio, the world’s second-largest exporter, rejected a planned $19.5 billion investment by Aluminum Corp. of China, or Chinalco, that would’ve included stakes in Rio’s Australian iron ore operations. The deal was scrapped in favor of an iron ore venture with rival BHP, a venture which “hints heavily of monopoly,” the China Iron & Steel Association has said.


“The BHP-Rio joint venture is China Inc.’s worst nightmare,” Charlie Aitken, Southern Cross Equities Ltd. executive director, said today in a note. “China Inc. has attempted to make Rio appear a ‘dishonorable company’ ever since Rio left Chinalco at the altar and ran into BHP’s arms.”

Hunan Valin Iron & Steel, Fortescue’s second-largest shareholder with a 17.3 percent stake, said in May it would help Fortescue produce 100 million tons of iron ore a year. It started output from its A$2.8 billion mine in May last year. Chinese financing of as much as $6 billion could fund an expansion to 155 million tons a year and potentially pay some debt, Southern Cross said in a report yesterday.

“Fortescue’s cash flow would be squeezed unless it paid down existing debt or it quickly and significantly increased sales volumes,” Morgan Stanley said today in a note.

Rio’s share of ore output in the 12 months to June 30, 2009, was 151 million tons, while BHP reported output of 114.4 million tons in the 12 months ended June 30. BHP has approved spending of $4.8 billion to increase capacity to 205 million tons a year from 2011 and is studying a further lift to 350 million tons a year. Rio is studying an expansion to 320 million tons.

“China’s strategic aim to encourage as much as iron ore production as possible has the ability to undermine the historical high returns that iron ore has generated,” Citigroup Inc.’s Clarke Wilkins said yesterday in a report.

Source: Bloomberg

Fortescue Ships 27.3 Million Tonnes Of Iron Ore In 09 Fiscal Year

Fortescue Metals Group Ltd marked its first full year of production by shipping 27.3 million tonnes of iron ore in fiscal 2009, slightly above its target. The figure makes Fortescue Australia's third largest iron ore miner behind Rio Tinto Ltd and BHP Billiton. The company said it would maintain a run rate of 35 million tonnes per year through the first half of 2010.

In April, Fortescue expected to sell about 26 million tonnes in the year ending June 30, 2009.

BC To Ship Iron Ore Over Fortescue Railways

Australia's Pilbara iron ore minnow BC Iron Ltd says it has struck a deal with the Fortescue Metals Group to ship ore to port over Fortescue's railways. BC said on Thursday that the in-principle agreement related to its Nullagine Iron Ore Project.

The agreement provides for an initial three million tonnes per year, rising to five million tonnes when port and rail facilities are expanded.

BC Iron managing director Mike Young said that whilst final details were being worked out, the deal would overcome the critical barriers to production caused by lack of open access to rail and port facilities.

Source: Trading Markets

China "May Have To Pay Spot Prices" - Forrest

Fortescue Metals Group Ltd chief Andrew Forrest says China may have to pay spot prices for iron ore if it doesn't accept the contract prices set with Japan as the new benchmark.

Mr Forrest said China's steel makers will either have to accept the new iron ore prices its rival miner Rio Tinto Ltd struck with Japan this week or choose the "dangerously volatile" spot price.

Major producers would not agree to a different benchmark price with China, he said.

Chinese steel makers are pushing for cheaper iron ore prices than the 33 per cent discount struck this week by Japanese and Korean steel mills with Rio Tinto.

"As a major importer of iron ore, which Japan has been - it founded the Pilbara and will always be a major importer of iron ore - if they have now set a price and it doesn't get followed, then that is fine," Mr Forrest told journalists in Sydney.

"But those that choose not to follow it have to have the alternative, which is the spot price."

Rio Tinto, the world's second-largest iron ore miner, on Tuesday agreed to new 2009 contract prices for fine and lump iron ore from its Hamersley Iron operation with Japan's biggest steel maker Nippon Steel Corporation.

It agreed to supply Nippon with fines at a 33 per cent discount to the 2008 contract price, and lump at a 44 per cent discount to last year's price.

But China's steelmakers are pushing for a price reduction of around 40-45 per cent and BT Investment Management resources analyst Tim Barker said this week they would probably hold out for the better deal.

"I don't think there will be a quick settlement with the Chinese," Mr Barker said.

Iron ore prices have dropped due to weak demand caused by the global economic slump.

South Korea's top steelmaker Posco said on Thursday it had negotiated a deal with Rio Tinto at the same prices set by Nippon.

Posco, the world's fourth largest steelmaker, said it would buy iron ore for $US58.2 ($A75.02) to $US68.9 ($A88.81) per tonne.

It remains in talks with other major iron ore suppliers, including BHP Billiton and Brazil's Vale, about prices for the current contract year.

Mr Forrest said the iron ore spot price was highly volatile.

"If they don't accept the Nippon/Rio new benchmark, they will consign themselves to the spot market and that certainly in the past has shown extreme upside volatility.

"I think the whole of the industry would prefer a benchmark.

"The spot price is dangerously volatile.

"Whichever way China goes will have very formative impact on the future of the global seaborne iron ore trade."

Mr Forrest said he was confident of China's recovery from the economic downturn and said Chinese demand for iron ore was strong.

"We think that China's recovery is absolutely certain."

Asked if production was tracking with guidance, Mr Forrest said the "trend was very healthy".

Mr Forrest was also asked if the sales guidance of 26 million tonnes for 2008/09 still stands.

"I think we will probably be upgrading that, but let me get back to you," Mr Forrest said.

Mr Forrest also said Fortescue was "absolutely serious" about listing on the Shanghai stock exchange.

The plan follows Chinese mill Hunan Valin Iron and Steel Group Company acquiring a 17 per cent stake in Fortescue last month.

Source: Sydney Morning Herald

Fortescue Cuts Sales Forecast

Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, has cut its full-year sales forecast by 15 percent because of slower than anticipated mining rates.

Sales are expected to be 26 million metric tons in the year ending June 30, Perth-based Fortescue said today in a statement to the Australian stock exchange. Shipments fell to 6.17 million metric tons in the three months ended March 31, from 6.28 million tons in the previous quarter, it said.

Cia. Vale do Rio Doce and Rio Tinto Group, the world’s two largest iron ore exporters, have slowed output as the worst recession since the Great Depression slashes demand from steelmakers. Fortescue started production from a mine, rail and port operation in Western Australia last year.

Source: Bloomberg

Fortescue Shares Suspended

Fortescue Metals Group Ltd, Australia's third-biggest iron ore miner, plans to raise an unspecified amount of capital after requested a trading suspension on its shares.

Fortescue, did not give any further details after trading in its shares was suspended placed in a trading halt, which will remain in place until either the company makes an announcement, or normal trading begins on February 25.

Company spokesperson Cameron Morse would not confirm or deny a report in the The Australian Financial Review that it would raise a minimum of $500 million from institutions including Chinese steel maker Hunan Valin Iron and Steel.

The fund raising is expected to underpin the expansion of Fortescue's iron ore operations in the Pilbara, the paper says. The company wants to more than double its iron ore production capacity to 120 million tonnes a year.

Valin is reportedly in talks to buy some of Harbinger Capital's near-16 per cent stake in Fortescue.

Harbinger, a long-time investor in Fortescue is expected to sell between 5-10 per cent to the Chinese group.

Source: Business Spectator

Chinese Taking Increasing Interest In Australian Miners

Australian miners are seeing an unprecedented level of interest from Chinese entities seeking to invest in their operations. So says Andrew Forrest, CEO of Australian iron ore miner, Fortescue

Mr Forrest said that "The increase from China, from Asia, to get involved in Australian sourced businesses is unparallelled right now. I think what has occurred in China is an understanding that assets that really weren't for sale at any price just might now be for sale."

Earlier this week Rio Tinto said it was in talks with the Aluminum Corporation of China - Chinalco - about possibly selling the Chinese group minority stakes in some of its assets and issuing it with a convertible equity.

Mr Forrest said the talks between Rio and Chinalco had been going on for some time and that other Australian miners had also been in discussions with interested Chinese parties.

He noted that "Rio talking the option through with China has been around for months and I feel that Rio are not alone in that, all of us have received very strong interest."

Fortescue did not need to do a deal with a Chinese group to fund its expansion program but would not rule out doing a deal if it made sense.

Mr Forrest added that "We are well capitalised but if an opportunity came across our table that really locks in long-term customer supply, that really locks us further and deeper into China, then we will look at it seriously."

Mr Forrest further said he believes commodity markets will bottom in 2009 and that the drivers of the mining boom will remain intact. He is confident the stimulus packages being put in place by the Chinese government will quickly boost the Asian giant's economy and turn around demand for commodities.

Fortescue expects Chinese steel consumption to be 500 million tonnes in 2009 and for this figure to rise to 750 million tonnes by 2025, underpinning demand for iron ore.

Miners are also benefiting from falling capital costs as the heat comes out of the industry, the cost of Fortescue's yet to be approved expansion of production to 120 million tonnes a year is likely to fall by between 10% and 20%.

Source: Dow Jones

Fortescue Iron Ore Shipments Down In January

Australia's Fortescue Metals Group Ltd. shipped 1.9 million tonnes of iron ore from its operations in the Pilbara region of Western Australia in January, Executive Director Graeme Rowley said on Thursday. This compared to 2.67 million tons of ore in December, according to the Port Headland Port Authority. Shipments since the end of January have taken the year to date shipments to 2.4 million tons.

The fall in shipments is being blamed on a maintenance outage as well as a brief outage following the death of a worker.

Fortescue is targeting monthly production of 3.6 million metric tons and expects to produce 23.8 million metric tons of ore in the second half of the financial year ending June 30, bringing output for the year to 39 million metric tons.

Fortescue Posts $1 Billion Profit

West Australian iron ore miner Fortescue Metals Group has booked a $1.097 billion net profit in its first full half year of mining. It also says it is aiming to increase production from its flagship Cloudbreak mine in the Pilbara to 23.8 million tonnes (mt) in the second half, giving it full year production of 39 Mt.

The profit for the six months ended December 31 followed a $1.058 billion loss in the previous corresponding period.

Revenue for the first half of 2008/09 was $1.464 billion, compared to nil previously.

Earnings before interest, tax, depreciation and amortisation, excluding a shipping loss of $74 million was $715 million.

Executive director Graeme Rowley said the company had $439 million cash on hand at the end of December.

“The key driver for this improved production rate will be the flow on benefits from the extensive overburden removal program during the last quarter,” the company said in a statement on Friday. Overburden is the ground cover above an ore deposit.

The company said the volume of ore processed during the December quarter was 6.112 Mt, down from 6.682 Mt for the previous quarter.


The forecast volume of processed material for the second half was 18 Mt, which would provide a full financial year result of about 31 Mt. The discrepancy between the volume of mined ore and that of processed ore was due to a loss of material through the plant while ultra-fines are washed to reduce alumina levels. It was also due to a build-up of stockpiled material at the mine site, which is part of a plan to reduce moisture within the feedstock for the ore processing facility.

Fortescue exported 15 Mt of iron one between May 15, when the mine started production, and January 8.

It said in mid-November it would produce 19.8 Mt during calendar 2008, down from previous estimates of 22 Mt.

Source: The West Australian

Fortescue Joins China Iron Ore Talks

Reports from China suggest that Fortescue, the Australian iron ore miner, has for the first time joined iron ore negotiations in China with the 'big three' iron ore miners.

Mr Xu Xiangchun Mysteel information director of the China Iron and Steel Association noted that Fortecue's planned delivery to China of 50 million tons of iron ore in 2009 puts it in second place behind BHP Billiton and therefore its participation would loosen the duopoly in iron ore supply to China.

Fortescue now owns a prospecting area of 40,000 square meters in the Pilbara region of West Australia with an estimated total resource of 4.2 billion tonnes. It expects to produce 12 million tonnes of iron ore this year, and aims to lift output to 100 million tonnes in 2010, becoming the fourth largest iron ore supplier in the world.

Meanwhile Mr Shan Shanghua, the secretary-general of China Iron and Steel Association, stressed that China's steelmakers will insist on a price decrease and that the settlement should apply from January 1st 2009 for new term supply.

He said that China normally followed Japan to close the account on 31 March but it would be more beneficial as China's buyers viewed the new term price would doubtlessly belower than last year.

Source: Steel Guru

Update 19 January 2009: Fortescue rejects iron ore talks invitation

West Australians Confident On Iron Ore Outlook

THE Dampier Port Authority in West Australia has said that it is encouraged by the outlook for iron ore shipments over the next few months. This was despite a recent move by major user Rio Tinto to cut back production of the steel-making ingredient, authority chief executive officer Steve Lewis said yesterday.

"I'm quietly optimistic -- certainly looking ahead to the forward arrivals of vessels here, it looks pretty healthy," he said.

Dampier has four vessels in port and is "nearly as busy as we normally would be", following the resolution of credit concerns for Western Australia's iron ore shippers. Shipping is returning to normal, following the "hysteria" of October-November in which some vessels struggled to get credit because of the global financial crisis, Mr Lewis said.

Rio Tinto, Australia's biggest iron ore exporter, turned away "20 or so" vessels from Dampier in that period because the ships did not have acceptable letters of credit, Mr Lewis said.

"We're not seeing that now. Towards late November and early December, you started to see some of the hysteria go out of the shipping side of the world," he said.

In November, Rio revised down its estimate of iron ore shipments from the Pilbara in 2008 to 170-175 million tonnes from previous guidance of 190-195Mt. Rio Tinto said it would also reduce its Pilbara production by 10 per cent. Even if Rio's production did fall 10 per cent, Dampier expected iron ore exports in the fiscal year to June 30to exceed the 112Mt of the previous 12 months.

Dampier's optimism is the latest encouragement for Australia's iron ore miners, badly affected by the drop in Chinese demand last year.

At Port Hedland, the Pilbara's other major iron ore port, BHP Billiton shipped 10.6Mt of iron ore in December, up from 10.1Mt in November, the Port Hedland Port Authority said. BHP, Australia's second-biggest iron ore exporter, has said it does not plan to scale back its Pilbara production, with any tonnes surplus to contract requirements to be sold into the spot market. But BHP's December exports were still 13 per cent down on the June record of 12.26Mt, shipped during the peak of the iron ore boom.

The latest Port Hedland statistics also show a strong recovery in export volumes for Fortescue Metals Group following a temporary port closure in November to carry out expansion work. Fortescue's December shipments of 2.7Mt were up 50 per cent on the November figure of 1.8Mt, and bettered the previous record July shipments of 2.5Mt.

SourcE: The Australian