The Fortescue Ltd (ASX: FMG) share price is in focus after the company announced its March 2024 quarterly update.
Fortescue is a major iron ore miner and it is also aiming to become a significant producer of green hydrogen and green ammonia.
March 2024 quarter
Fortescue reported total ore shipped of 43.3 mt, which was down 11% quarter on quarter and down 6% year on year because of the impact of an ore car derailment on 30 December 2023, and weather disruptions.
However, the company did say shipments recovered during the quarter, with a record month for shipments of 18.7mt achieved in March 2024.
Fortescue said its C1 (mining costs) were US$18.93 per wet metric tonnes, an increase of 7% compared to the second quarter of FY24 because of the lower sales volume.
Fortescue’s average revenue per dry metric tonne (dmt) for its normal production was US$104, 85% of the average Platts 62% CFR Index. However, because its production is generally lower grade, it doesn’t receive as much revenue per tonne.
Iron Bridge – a new high-quality iron project – concentrate revenue was US$145 per dmt, which was 107% of the average Platts 65% CFR Index.
Green progress
Fortescue said it successfully conducted the world’s first use of ammonia as a marine fuel aboard the Fortescue Green Power vessel.
This month it announced a joint venture with OCP Group, which it described as the world leader in plant nutrition solutions and phosphate-based fertilisers, which aims to supply green hydrogen, ammonia and fertilisers to Morocco and international markets.
Fortescue also opened its new Gladstone electrolyser facility in Queensland, with manufacturing capacity of more than 2GW per year.
Fortescue’s first operational electric excavator has moved over 1 million tonnes of material since being commissioned. The battery electric haul truck prototype has completed its first phase of testing.
Final thoughts on the Fortescue share price
Unsurprisingly, Fortescue said its total shipments for FY24 is now expected to be at the lower end of its guidance of between 192mt to 197mt because of the derailment. But, that derailment is in the past – it’s not new news – and the company will hopefully be able to perform well from now on.
I like what Fortescue is doing, which is why I’m a shareholder. It has major green energy ambitions, time will tell if it can produce as much as it wants to, and whether there is the customer demand for it (who are willing to pay a high price).
The Fortescue share price has drifted lower in the last few months, but I wouldn’t choose to invest unless the iron ore price fell to a price where the market was fearful about the commodity (such as below US$100 per tonne). Until then, there are more predictable ASX dividend shares I’d rather buy.
