* H2 net profit up 8 pct to $758 mln vs $716 mln consensus
* Sees benefits from mining boom continuing for some time
* Says selling all ore, sees price recovery to $120-150/T
* On track to ramp up production to 155 mln T/yr by mid-2013
Aug 23 Australia's Fortescue Metals Group
remained confident about the prospects for a pick-up in
Chinese demand and prices for iron ore after posting a
stronger-than-expected 8 percent rise in second-half profit on
With iron ore prices having sunk to their lowest levels
since December 2009 on worries about Chinese growth, investors
are nervous Fortescue may face a funding shortfall for its $9
billion project to triple its annual operating rate to 155
million tonnes by July 2013.
Australia's no.3 iron ore miner put on a brave face, saying
it remains confident China's demand for the key steel-making
ingredient will improve later this year as steel output picks up
on the back of government moves to boost infrastructure
"In the short term we have seen an overrun of steel supply
capacity and that has driven a reduction in steel prices," Chief
Executive Nev Power told reporters.
"We expect to see iron prices return to the $120 to $150
range in the short-term to medium term."
Iron ore with 62 percent iron content .IO62-CNI=SI, the
industry benchmark, fell 2.7 percent to $106.40 a tonne on
Tuesday, its weakest since Dec. 16, 2009, based on data from the
The slowdown in China and corresponding falls in prices for
iron ore, coal and other resources has prompted major miners
including BHP Billiton and Xstrata to scale
back projects, with BHP shelving a planned $20 billion expansion
of its Olympic Dam copper and uranium mine.
On Thursday, Australia's resources minister said the boom
that had shielded the country's economy from the global
financial crisis had ended.
Fortescue sounded a more upbeat note, hailing a
"spectacular" year and saying the boom was not over by any
"There is a boom and it's continuing and those volumes will
continue in the future, bringing enormous benefits to
Australia," Power said
Net profit for the six months to June rose to $758 million
from $705 million a year earlier, as calculated by Reuters off
full-year figures. Analysts had expected a second-half profit of
$716 million, according to Thomson Reuters I/B/E/S.
Fortescue shares steadied at A$4.15 on Thursday, valuing
founder Andrew "Twiggy" Forrest's holding of about one billion
shares at more than A$4 billion.
The stock has slumped by about a third from a high of A$6.18
in March against a 2 percent gain in the broader market
due to concerns about soft iron ore prices sapping the miner's
capacity to fund its ambitious expansion.
(Reporting by Sonali Paul in Melbourne and Lincoln Feast in
Sydney; Editing by Edwina Gibbs)