(Adds other performance metrics, CEO comment)
Oct 25 (Reuters) - The world's No. 4 iron ore miner Fortescue Metals FMG.AX on Thursday reported an 8.6 percent fall in first-quarter iron ore shipments as pollution curbs in China reduced demand for its lower grade ore.
Fortescue shipped 40.2 million tonnes in the September quarter, down from 44 million tonnes a year ago, the company said in a statement.
It maintained its fiscal 2019 production guidance at 165 million to 173 million tonnes.
Fortescue has been hit by falling prices for its lower grade iron ore as Chinese steel mills have turned to higher-grade, less-polluting iron ore. The lower prices led to a halving of its profit for the fiscal year to end-June 2018. miner has since looked to clamp down on costs and is aiming to grow margins with a new, higher grade product.
However, cash production costs averaged $13.19 per wet metric tonne over the quarter, nearly 9 percent higher than the year-ago period, due to maintenance, overburden removal and higher fuel costs.
Fortescue maintained its 2019 cost guidance at $12-$13 per wet metric tonne.
"Shipments of our 60.1 percent iron grade product, West Pilbara Fines are scheduled to commence from December this year, further enhancing our product mix," Chief Executive Elizabeth Gaines said in a statement.
The miner said it expected to deliver between 5 million and 10 million tonnes of the higher grade ore during the second half of fiscal 2019.
Fortescue also said the discount for its lower quality ore has narrowed, with the miner receiving 67 percent of the average benchmark Platts 62 CFR index .IO62-CNO=MB for its ore during the quarter, up from 63 percent in the previous quarter.