MELBOURNE, Jan 28 (Reuters) - Fortescue Metals Group FMG.AX expects to achieve a cash breakeven price well below $36 a tonne, its chief executive said on Thursday, after the company reported it had cut its production costs faster than planned.
"That results in a substantial reduction in our cash break even below our last guidance at $36 a tonne," Chief Executive Nev Power told reporters, adding that sharply lower freight costs and cuts in capital spending and debt had helped.
Iron ore with 62 percent iron content last traded at $41.30, and Fortescue's lower quality iron ore typically fetches between 85 and 90 percent of that price, which means it is still making a small margin.