FMG chief financial officer Stephen Pearce and chief executive Nev Power at the company s Solomon mine. Picture: Mogens Johansen/The West Australian.
FMG chief financial officer Stephen Pearce and chief executive Nev Power at the company's Solomon mine. Picture: Mogens Johansen/The West Australian.

UPDATE 1.35pm: Fortescue Metals Group has continued to pay down its massive debt pile by moving to redeem two lots of senior unsecured notes worth $US1.6 billion.

Today's announcement comes less than a month after Fortescue repaid an initial US$1 billion of its 2015 notes and takes total debt repayments made by the iron ore miner since November last year to $US3.07 billion.

Fortescue said its gross debt, which peaked at $US12.7 billion as it ramped up its operations last year, would fall to $US9.6 billion by the end of March ($US7.8 billion net).

Chief executive Nev Power said the voluntary redemption of the notes underscored Fortescue's commitment to repay the debt that funded the company's expansion to 155 million tonnes per annum.

"This is a pivotal year for Fortescue as we near the completion of our expansion," he said.

"The substantial increase in production and strong market conditions have strengthened our balance sheet and enabled us to accelerate our debt reduction program."

FMG found itself heavily exposed in September 2012 as plunging iron ore prices brought its margins under extreme pressure.

But the company has since benefitted from stronger prices for the steel-making commodity and used its extra cashflow to pay down debt.

Fortescue's chief financial officer Stephen Pearce said the recent measures continued to reduce Fortescue's gearing towards 40 per cent.

"We've taken another significant step in reducing Fortescue's debt levels," he said.

"The combination of voluntary debt repayments of US$3.07 billion, in addition to successfully lowering the cost of remaining debt, represents an annual interest saving of more than $US300 million per annum."

Fortescue shares closed up 18 cents, or 3.5 per cent, at $5.33.

The West Australian

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