The Fortescue Metals Group Limited (ASX: FMG) share price is ending the week strongly.
In morning trade, the mining giant's shares are up 3.5% to a 52-week high of $23.25.
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Why is the Fortescue share price rising?
Investors have been bidding the Fortescue share price higher today following the release of the miner's second quarter and first half production update.
According to the release, for the three months ended 31 December, Fortescue delivered iron ore shipments of 49.4 million tonnes. This underpinned a 4% increase in half year shipments to a record of 96.9 million tonnes.
This was achieved with a second quarter C1 cost of US$17.17 per wet metric tonne (wmt). While this was up 12% year over year, it was a 3% improvement on the US$17.69 per wmt that it reported during the first quarter.
Fortescue commanded an average of US$86.93 per dry metric tonne (dmt) for the quarter, which equates to a discount of 88% to the average benchmark 62% fines iron ore price for the period.
While no earnings data was provided, Fortescue revealed that its cash balance increased US$700 million during the quarter to US$4 billion.
Management commentary
Fortescue's Executive Chairman, Dr Andrew Forrest AO, commented:
The Fortescue team delivered our highest ever December quarterly shipments of 49.4 million tonnes, our best ever half year, grew the mineral and green energy business globally, strengthened our balance sheet, kept costs low, all while maintaining our excellent safety performance.
We are now nearing the 200 million tonne annualised rate in our iron ore business even before we commission Iron Bridge. Our Company has never performed better on the mining, exploration, green hydrogen and green energy development front, while leading the world as the first heavy industry company to achieve real zero with a fully costed plan.
Demand for Fortescue's suite of iron ore products remains strong and our entry into the higher grade segment of the market has been well received, with significant interest in the Iron Bridge magnetite concentrate.
FY 2023 guidance
Pleasingly, there has been no change to Fortescue's guidance for the full year. It continues to target iron ore shipments of 187 million tonnes to 192 million tonnes with a C1 cost of US$18 to US$18.75 per wmt.
Capital expenditure excluding Fortescue Future Industries (FFI) is expected to be US$2.7 billion to US$3.1 billion. Whereas FFI's anticipated expenditure comprises US$500 million to US$600 million of operating expenditure and US$230 million of capital expenditure.
