Fortescue reports iron-ore sales gap and first electric-smelting output

Fortescue’s September-quarter report, released on 22 October, showed iron-ore shipments of 46.8 million tonnes in Q1 FY27 and sales of 42.9 million tonnes. The company said the 3.9-million-tonne difference reflected ongoing negotiations with China Mineral Resources Group, its Chinese customer and market counterpart.

The report also recorded the effects of major port maintenance during the quarter. Fortescue said it replaced critical infrastructure, including a tippler cell in Train Unloader 1 and components on a reclaimer and shiploader. Shipments were 6% below the year-earlier quarter, and product inventories were expected to increase by another 4–5 million tonnes in October.

Hematite C1 unit cost was US$21.98 per wet metric tonne, 21% above the prior-year quarter. Fortescue attributed about US$1.40 per tonne of the increase to higher diesel prices, with general inflation and lower supply-chain volumes also affecting costs. The realised hematite price was US$79.79 per dry tonne.

At Blacksmith, the company reported a 615-million-tonne mineral resource and a maiden 196-million-tonne ore reserve at an average iron grade of 58%. Resource and reserve are separate classifications; the reserve figure is the part reported under the applicable economic and technical assessment standard.

Fortescue said its Green Metal Project at Christmas Creek produced first hot metal, marking the first successful operation of its electric-smelting process. The report also said turbine components had arrived for the 133-megawatt Nullagine wind project and that 21 electric excavators were operating across its activities.

FY27 guidance remained at 197–207 million tonnes of shipments, with costs and capital spending guidance also unchanged, subject to negotiations with CMRG. Fortescue warned that operations could be affected if talks are not concluded by year-end. The report does not say production changes have already occurred.

The operating report separates mined and shipped material from the company’s cost and balance-sheet measures. C1 is a unit operating-cost measure, while the shipment and sales volumes reflect activity through the quarter; they should not be conflated with annual capacity. Fortescue attributed cost pressure in part to diesel, which added about US$1.40 per wet metric tonne year on year. The company did not state that this increase alone explains the full C1 movement.

Other parts of the report describe developments beyond iron ore. Fortescue reported a maiden 196-million-tonne reserve at Blacksmith within a 615-million-tonne resource, progress on its Green Metal project and delivery of wind turbines for Nullagine. It also said more than 40 tonnes of copper concentrate from Toowong had been sold. These updates are at different project stages and do not represent equivalent production streams or recurring earnings.