Australia's third-largest iron ore producer FMG Group surged 76% in net profit in 2010/11

Australia's third-largest iron ore producer FMG Group said that due to the rise in iron ore prices, net profit surged by 76% to US$1.02 billion in the 2010/11 fiscal year ended June 30, 2011, and revenue from the previous fiscal year The annual increase of 3.2 billion U.S. dollars to 5.4 billion U.S. dollars.

According to NevPower, FMG's chief executive, revenue and profit growth was mainly driven by rising iron ore prices. The average selling price of iron ore increased from US$80/tonne in the previous fiscal year to US$149/tonne. Iron ore shipments increased slightly from 38 million tons in the previous fiscal year to 40 million tons.

Power said that currently China's credit policy [0.87 -9.38%] is shrinking, prompting a slowdown in iron ore demand. However, the company’s order has not been affected and no customer has asked to cancel or postpone the delivery.

At present, FMG is accelerating its expansion to meet Asian demand. The company is advancing its initial capacity expansion plan and will increase its annual iron ore production capacity from the current 55 million tons to 155 million tons by 2014. According to market conditions, the capacity will be further expanded to 255 million tons by the 2015/16 fiscal year.