Fortescue Metals Group's troubled Iron Bridge magnetite operation will produce fewer tonnes than previously expected for the year, but the miner has stuck to its guns on hitting targets regardless.
Iron Bridge, which shipped first ore to Vietnam in August, had been expected to contribute 7 million tonnes of higher-grade ore to Fortescue's overall target of between 192mt and 197mt.
Handing down results for the September quarter, the company revealed Iron Bridge's contribution would be 2mt short of that estimate.
Iron Bridge has had more than its fair share of delays and cost blowouts, driven by inflationary pressures and general processing complexities in refining the ore to a higher grade.
Costs swelled from an initial $US2.2 billion estimate before eventually landing on a $US3.9 billion price tag in February 2023. First ore was produced in May, despite an initial target start in the first half of 2022.
A $US726 million ($A1.1 billion) write-down was applied to the behind-schedule magnetite project due to delays in the project's ramp-up profile as well as higher construction costs.
Fortescue also reported that overall iron ore shipments were 3 per cent lower than the previous quarter, from 48.9mt to 45.9mt, although mined tonnes were up by about 4 per cent.
Despite the slower start to the year, group has maintained iron ore guidance for FY24.
Higher-grade product from Iron Bridge fetched $US131 per dry metric tonne, while average revenue for Pilbara hematite was $US100 per tonne for the quarter.
In a results call, new chief executive Dino Otranto said Iron Bridge was a fantastic project but also noted it was more complex than Fortescue's other iron ore operations in the Pilbara.
C1 costs for Pilbara hematite were 2 per cent higher than the prior quarter at $17.93/wmt, within Fortescue's targeted cost guidance of between $US18/wmt and US$19/wmt.
Meanwhile, Fortescue Energy is still due to make final investment decisions on five projects before the end of the calendar year.
Shares in Fortescue closed the day up 0.86 per cent at $22.21.
