Fortescue Metals Group Limited
(ASX:FMG) has outlined plans to cut staff, spending and its expansion as a result of plunging prices for its main product, the steel making commodity iron ore.
The Pilbara focussed miner has decided to defer its Kings development in the Pilbara and its fourth berth at Herb Elliott Port until iron ore prices lift from recent lows of about $US89.00 per tonne.
Fortescue has also lowered its CAPEX guidance from an expected $US6.2 billion in fiscal 2013 to $US4.6 billion.
Immediate staff losses and reduced operating costs are expected to save about $US300 million.
The company says it has taken the action in response to volatile market conditions and uncertainty over future iron ore prices.
CEO Nev Power says Fortescue is confident in the underlying fundamentals of the Chinese economy and believes iron ore prices will rebound in the medium term, but has moved quickly to strengthen its balance sheet.
