Suppliers key to FMG cost cuts

SUPPLIERS helped Fortescue Metals Group achieve record low costs over the December quarter.
Suppliers key to FMG cost cuts Suppliers key to FMG cost cuts Suppliers key to FMG cost cuts Suppliers key to FMG cost cuts Suppliers key to FMG cost cuts

FMG's Christmas Creek iron ore mine.

Andrew duffy

The Pilbara heavyweight reported C1 costs at $US15.80 per wet metric tonne for the final three months of the year after shipping 42.1 million tonnes of iron ore.

Costs were down a whopping 45% on the same time last year, while a 3% production hike put it on track to hit sales guidance of 165Mt.

Taking stock of the performance, FMG chief financial officer Stephen Pearce said procurement initiatives had continued to form a key part of the cost cutting strategy.

“Yes we’re renegotiating contracts with suppliers, but we’re also working with those suppliers to look at smarter and innovative ways to deliver the outcomes we need,” he said.

December marked the eighth consecutive quarter of cost cuts for FMG, with the company also focusing on paying back debt.

Net debt finished at $6.1 billion alongside $2.3 billion in cash, with $750 million repurchased over the December period.

Pearce said FMG would continue to look at lessening the burden over the next few months.