Australia: FMG’s iron ore shipments decline 6% y-o-y in Q1FY’27 amid ongoing negotiations with CMRG

• Mine volume increases by 4% y-o-y, while processed volume declines 4%
• FY’27 shipment guidance remains at 197-207 mnt, subject to CMRG negotiations

Fortescue Metals Group (FMG) reported total iron ore shipments of 46.8 million tonnes (mnt) in the quarter ended September 2026, i.e., Q1FY27, down 6% y-o-y from 49.7 mnt and down 11% q-o-q from 52.7 mnt, reflecting the impact of ongoing negotiations with China Mineral Resources Group (CMRG).

Operational performance

FMG’s total iron ore mined increased 4% y-o-y to 62.7 mnt in Q1FY’27 from 60.1 mnt in Q1FY’26. However, ore processed declined 4% y-o-y to 48.8 mnt from 50.8 mnt. Shipments comprised 44.3 mnt of hematite and 2.5 mnt of Iron Bridge concentrate.

Iron ore sales stood at 42.9 mnt, 3.9 mnt below shipments, reflecting the impact of ongoing negotiations with CMRG. The company expects product inventory to increase by a further 4-5 mnt in October 2026 as it continues to optimise product placement channels. FMG cautioned that operations could be affected, potentially including production adjustments, if negotiations remain unresolved by the end of calendar year 2026.

In the press release, Fortescue Growth and Energy Chief Executive Officer, Dino Otranto, said, “We shipped 46.8 million tonnes of iron ore in Q1, including 2.5 million tonnes from Iron Bridge. That’s a solid result, especially with our teams carrying out our biggest-ever shutdown across port operations. We’ve replaced critical infrastructure, including the tippler cell in Train Unloader 1 and major components on our reclaimer and shiploader.

“We’ve now reported our first Ore Reserve at Blacksmith — 196 million tonnes at an average grade of 58 per cent iron. That’s a major milestone for the team and a strong result from an asset we acquired for its potential to unlock significant value. As existing mines mature, Blacksmith will play an important role in maintaining production and ensuring Fortescue remains positioned as a low-cost, capital-efficient operator.

“We’re continuing to bring battery electric equipment to the Pilbara. Our electric excavators are already delivering greater productivity than their diesel equivalents, and we’re applying what we’ve learned as we bring more electric equipment into the fleet.”

Other highlights

• FMG reported a maiden Ore Reserve of 196 mnt at an average iron grade of 58% for its Blacksmith project, while its Mineral Resource increased 153% to 615 mnt. The company also advanced its decarbonisation initiatives, producing its first hot metal at the Green Metal Project at Christmas Creek and progressing the 133 MW Nullagine Wind Project.
• As of 30 September 2026, FMG’s cash balance stood at $3.2 billion, while net debt increased to $2.8 billion from $0.9 billion at the end of June 2026, following dividend payments and capital expenditure. The company maintained its FY’27 shipment guidance at 197-207 mnt, including 11-14 mnt from Iron Bridge, and hematite C1 unit cost guidance at $20.50-21.75/wmt. Guidance remains subject to ongoing negotiations with China Mineral Resources Group (CMRG).

FMG’s FY27 guidance

• Shipment guidance: FMG has guided 197-207 mnt of total iron ore shipments for FY’27 (July 2026-June 2027), including 11-14 mnt from Iron Bridge (100% basis).
• Cost guidance: Hematite C1 unit cost is expected at $20.50-21.75/wmt, based on an assumed average AUD:USD exchange rate of 0.70. Higher diesel prices, inflationary pressures and exchange-rate assumptions are expected to lift costs compared with FY’26.

Note: FMG follows a July-June financial year, with FY’27 spanning July 2026 to June 2027.