* Fortescue H1 profits rises to $1.7 billion
* Sets fiscal 2014 iron shipment target at 127 million
* Costs drop 34 percent to $33 per tonne
By James Regan
SYDNEY, Feb 19 Australian miner Fortescue Metals
Group said half-year net profit more than tripled to
$1.7 billion, in line with market forecasts, as it raced to dig
more iron ore to meet higher production targets.
The world's fourth-biggest iron ore producer set a guidance
target to ship 127 million tonnes in the fiscal year to June 30,
2014, up from 81 million the previous year as it enters the
final stages of an $11 billion expansion programme.
Fortescue said it lowered its cash cost of production over
the period by more than a third to an average $33 per wet tonne,
helped a weaker Australian dollar.
Spot iron ore prices currently stand at
$124.40 a tonne, according to data compiler Steel Index.
Iron ore continues to generate big returns and miners in
Australia - the world's biggest supplier - are counting on
greater economies of scale to maintain profits for the
steel-making raw material.
Following in the path of other miners, such as BHP Billiton
BLT.L> and Rio Tinto , Fortescue said
it was reducing capital spending as construction work on new
projects nears an end and concerns mount over cooling industrial
growth in China, the main market for Australian iron ore.
Capital expenditure in fiscal 2014 is expected to shrink to
$2.1 billion, $4.1 billion below the previous year, it said.
Fortescue is targeting debt repayments of between $4 billion
and $5 billion in 2014, before setting up its next stage of
growth in iron ore production beyond an annualised rate of 155
"The ongoing strong demand for our products has allowed us
to accelerate debt repayment, de-risk the balance sheet and
increase returns to our shareholders," Fortescue Chief Executive
Nev Power said in a statement.
The firm said its net debt stood at $8.6 billion as of Dec.
BHP Billiton and Rio Tinto also reported sharply higher
interim profits, with the bulk of the earnings coming from their
iron ore divisions.