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
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