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Fortescue calls in debt amid iron ore collapse

Major Australian iron ore miner Fortescue Metals Group has launched a tender offer to call in $750 million of debt, in a bid to reduce interest cost amid a commodities price collapse.

"We've been accumulating cash now with cash flow from operations remaining very strong as we reduce our costs, and we're using that cash to pay down debt," Fortescue's chief executive Nev Power told CNBC's Capital Connection on Wednesday.

Prices of iron ore have tanked more than 30 percent this year due to slowing growth in China, hitting miners like Fortescue and its competitors Vale, Rio Tinto and BHP Billiton.

In a bid to gain market share and squeeze out smaller miners however, the big producers have not cut production levels, driving down their own costs instead.

Read MoreHere's why iron ore prices aren't rising anytime soon

Fortescue has made an aggressive push to scale back its debt with an aim to reduce overall gearing to 40 percent from about 56 percent at mid-2015.

The miner expects its production costs to be $15 per ton of iron ore by the end of the year, down from a $18 a ton target set in July.

Commenting on persistent speculation that Fortescue may see a new investor from the likes of Chinese giants Baosteel or Citic, Power said the iron ore producer was open to introducing new investors to the business but would evaluate any opportunities closely.