Australia’s Fortescue cash drops over 37% amid China buying curbs
Fortescue said on Thursday its cash balance fell 37% in the September quarter and warned its forecasts remained subject to ongoing negotiations with state-backed buyer China Mineral Resources Group.
Earlier this year, CMRG had asked some mills not to take delivery of Fortescue’s flagship iron ore product during annual supply talks and sought a bigger role in iron ore contract negotiations with major miners as it looks to secure better terms for domestic steelmakers.
Fortescue, in a preliminary quarterly update, said cash stood at $3.2-billion at September 30, down from $5.1-billion three months earlier, while net debt more than tripled to $2.8-billion from $900-million at June 30. Its shares were down 1.8% at A$15.77 in early trading.
The miner maintained its fiscal 2027 forecast for iron ore shipments, C1 unit costs and capital expenditure, subject to negotiations with CMRG.
On a preliminary basis, first-quarter iron ore shipments fell about 6% over the year earlier to 46.8-million metric tonnes, due to maintenance activity, including scheduled port outload shutdowns.
Fortescue previously said it was exploring ways to increase port outload capacity, a measure of how much material can be loaded onto ships for export, at its Iron Bridge mine.
Iron ore sales totalled 42.9-million tonnes during the quarter, on a preliminary basis.