• SYDNEY, AAP – Iron ore miner Fortescue has warned full-year capital costs will increase due to the rising Australian dollar and major projects.

    Fortescue on Thursday issued its third-quarter production report, which showed 53.6 metric tonnes was mined – a big increase on the 41.9 metric tonnes in the same quarter last year.

    Boss Elizabeth Gaines said the commissioning of the Eliwana mine in the Pilbara helped the increase.

    Shipments were steady at 42.3 metric tonnes, as per the same quarter last year.

    Royal Bank of Canada mining analyst Kaan Peker said the quarter was weaker-than-expected due to higher costs and a lower realised price.

    The miner increased its capital costs estimate for the full year from $US3 billion to $US3.4 billion ($A3.9 billion to $A4.4 billion), to $US3.5 billion to $US3.7 billion ($A4.5 billion to $A4.8 billion).

    This was due to the strength of the Aussie dollar, works at its Iron Bridge magnetite project south of Port Hedland and efforts to reduce carbon emissions.

    The Iron Bridge project has been troubled by higher than expected costs. Three executives working on the project in February resigned for their role in the expense.

    Founder Andrew Forrest has championed efforts to reduce carbon emissions. These will include trialling large battery technology in haul trucks, hydrogen fuel cells in drill rigs and green ammonia in trains.

    Meanwhile, iron ore miners continue to benefit from Chinese steelmakers’ demand for the commodity.

    The iron ore price was at about $US190 per tonne.

    Fortescue shares were down 0.75 per cent to $22.45 at 1335 AEST.