UPDATE 1-Fortescue cuts iron ore production cost target
* Fortescue says to lower costs to $12-$13/t
* Keeps shipments guidance steady this year
* Debt down to $5.2 billion (Adds iron ore prices, CEO comment, dumping accusation)
SYDNEY, July 27 (Reuters) - Australia's Fortescue Metals Group on Wednesday lowered its production cost target for fiscal 2017 to $12-$13 per wet tonne, down from its fiscal 2016 average of $15.43 a tonne and taking it closer to bigger rivals.
The world no.4 iron ore miner also set shipment guidance for fiscal 2017 at 165 million to 170 million tonnes, little changed from the 169.4 million tonnes shipped in fiscal 2016..
The company said it sold its iron ore on average at 88 percent of the benchmark price, or $45.36 a tonne, over fiscal 2016. Iron ore stood at $57.40 a tonne on Wednesday .IO62-CNI=SI.
The reduction in so-called C1 costs this year would better align Fortescue's cost structure with those of larger rivals Rio Tinto , BHP Billiton and Vale and provide a greater cushion amid volatile iron ore prices.
Because Fortescue and other miners typically report production in terms of wet metric tonnes and the iron ore price is based on dry metric tonnes, an 8 percent reduction is applied to the wet tonnes to adjust for moisture content
"Costs have been lowered for the tenth consecutive quarter and our continued focus on productivity and efficiency measures will drive C1 costs even lower in fiscal 2017," Chief Executive Nev Power said in a statement. Continuación...