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Fortescue Q2'17 iron ore shipments dip 4% QOQ; production costs fall 21% YOY

Fortescue Metals Group Ltd. on Jan. 31 said that it shipped 42.2 million tonnes of iron ore during the three months ended Dec. 31, 2016, a 4% quarter-over-quarter decrease, and nearly flat on a yearly basis.

Cash production costs in the company's second quarter of fiscal 2017, however, fell 7% to US$12.54 per wet tonne on a quarterly basis, and down 21% over the year-ago period.

Total CapEx for the quarter came in at US$210 million, inclusive of sustaining capital, ship construction, exploration and development. Exploration expenditure, meanwhile, totaled US$9 million, while full-year exploration expenditure is estimated at US$40 million.

During the quarter, the company repaid US$1.0 billion in debt, reducing net debt to US$4.0 billion.

Fortescue maintained its full-year target for shipments at between 165 million tonnes and 170 million tonnes at a cost in the range of US$12 to US$13 per wet tonne.

Sustaining CapEx for fiscal 2017 is expected to average US$2 per wet tonne.