Blog

Iron Ore; FMG shows pathway to sustainable low cost production

Wednesday, February 24, 2016

FMG's 1H16 results show its pathway to US$13/wmt for iron ore C1 costs, in a world where 30%+ of supply is underwater.

FMG C1 iron ore cash costs came in at US$16/wmt at for the half year, with a US$2.50/t moisture penalty adjustment applied. FMG expects to continue drive cost efficiencies with it forecasting C1 cash cost of US$13/wmt at the end of June 2016. Partly this impressive cost reduction is due to ‘high grading’ and FMG but has announced that it can maintain its cost competitive strip ratio through to FY20. 



BHP recently estimated that more than 30% of current iron ore supply is being delivered at a financial loss, see our blog for more insights. 

In this current world of community oversupply, FMG’s C1 cost profile sits favourably alongside its peer RIO. As can be seen below RIO’s FY15 cash costs, on a dry weight basis, were US$15/t in FY15.



Go Back