Fortescue Metals posts record iron ore output amidst surging debt
Fortescue Metals (ASX:FMG) has posted a record-breaking 17.8 million tonnes of output for the June quarter, representing a rise of 42%, while its debt volume has also surged, swelling by a billion dollars to hit the USD9 billion mark.
According to Tim Boreham in the Australian, the pure-play producer has bolstered claims that it is poised to become a new key player on the iron ore scene with the record June output, and is now far closer to meeting its lofty target of 155mt per annum by this time next year.
Analyst fears of Fortescue running over budget to fulfill its ambitious goals have also been proven correct, however, with the Brisbane Times reporting that expansion costs are set to hit USD$9 billion, meaning debt levels will also soon peak at between USD$billion and USD$9Billion.
Fortescue is Australia's third largest mining company after Rio Tinto and BHP Billiton, all of which have been adversely affected of late by the recent slowdown in Chinese demand. Iron ore prices are down 25% year on year, with Fortescue's shares also dropping 28% over the same time period.