Fortescue Metals Group Ltd, Australia's fourth largest iron ore producer, announced a 2% year-over-year increase in iron ore shipments for the quarter ending December 31, with deliveries totaling 50.5 million wet metric tonnes (wmt). This uptick occurred against a backdrop of steady demand from international markets, supporting Fortescue's ability to increase volume despite a slight reduction in overall output.
During the same period, total iron ore mined fell marginally by 1% compared to the previous year, reaching 61.4 million wmt. A notable decline was observed in hematite production, the iron-rich ore, which decreased by 8% year-over-year to 52.0 million wmt. In contrast, production from the company's Iron Bridge project in the Pilbara region of Australia displayed significant growth, surging by 71% to 9.4 million wmt, indicating successful expansion efforts within that asset.
However, the cost structure for hematite mining saw an increase, with production costs climbing 5% year-over-year to $19.10 per wmt. Despite this cost rise in the December quarter, Fortescue has maintained its guidance for 2026, projecting iron ore shipments within the range of 195 to 205 million tonnes. The Iron Bridge project is expected to contribute between 10 to 12 million tonnes towards this target. The company anticipates that hematite production costs will average between $17.50 and $18.50 per wmt in the future, indicating an expectation of improved operational efficiencies or cost reductions.
Capital expenditure related to metals is forecasted between $3.3 billion and $4.0 billion. Concurrently, energy costs and other operational expenses are estimated at $300 million and $400 million, respectively, reflecting the scale and complexity of Fortescue’s mining operations.
The shipment increase at Fortescue aligns with improvements reported by major rivals BHP Group Ltd and Rio Tinto Ltd during the same quarter, driven largely by robust overseas demand. Yet, BHP has highlighted a trend of accepting lower prices in negotiations with Chinese buyers, a scenario that Fortescue and other Australian producers may encounter. The increase in Chinese iron ore inventories projected through 2025 is likely to strengthen Beijing’s position in price negotiations for future shipments, adding a degree of uncertainty to the market landscape.