According to The Australian, Mr Andrew Forrest chairman of Fortescue Metals Group Ltd chairman has begun charting a path to recovery for the company after it put a series of projects on hold three months ago due to sharply declining commodity prices.
Mr Forrest said that he is committed to completing new iron ore mine projects and meeting Fortescue's development targets in Western Australia's Pilbara.
The decision to put projects on hold also resulted in deep cuts to capital spending and staff numbers. But he said that the suspended projects could be restarted by the end of 2013, with a close eye on the outlook for the Chinese economy.
He said that "The iron ore price has also bounced back."
He added that "Chine will continue to grow and urbanize and this is off a higher base something people regularly don't factor in. I believe the new leaders will enact policies that will see China attain sustainable growth in the high single digits. At a conference in Florida early this year, I laid out the trends in the Chinese economy and that there would be a slowing in growth going into the leadership transition."
The report said that Fortescue is extremely sensitive to any dips in the Chinese economy. A sustained decline in China would destabilize the already debt laden company. Fortescue's operating costs are more than double those of Rio Tinto's, which is the lowest cost iron ore miner in the world.
Fortescue cut back its total production target from 155 million tonnes to 115 million tonnes and said it would cut more than 1,000 staff.
He said that "I believe that when you cut costs you should do it in a big way and quickly. Through the changes we made, we have no lowered our cost base by 10% to 15% as we strive to be in the bottom 25% of operations-cost operators."
