Fortescue Metals Group Limited (ASX: FMG) has seen its share price soar over 8% today to trade at around $3.55, despite iron ore sinking 2.5% on Friday.

The spot iron price fell 2.5% to US$50.61 a tonne on Friday, from US$51.89 a tonne on Thursday.

Fortescue’s share price usually tracks the movements in the iron ore price – given the company is 100% dependent on iron ore. The fact the company’s share price is tracking in the opposite direction is likely due to a number of factors.

More debt repaid

On Thursday last week, Fortescue announced that it was planning to repay a further US$500 of debt originally due in 2019 – saving the company US$21 in interest expenses each year.

As the chart below shows, Fortescue has made huge strides in repaying its debt, which once stood at more than US$11 billion in 2013.

Fortescue Metals debt profile

In fact, in the 2016 financial year so far, Fortescue has repaid an astonishing US$2.9 billion – slashing its interest bill by US$186 million. That is mainly as a result of the company’s truly extraordinary ability to slash its production costs to one that rivals the likes of Rio Tinto Limited (ASX: RIO), BHP Billiton Limited (ASX: BHP) and Brazil’s Vale.

S&P upgrades rating

Most likely as a result of the company’s ability to repay that debt, ratings agency Moody’s upgraded Fortescue’s rating to stable and affirmed the credit rating at Ba3.

Moody’s noted: “The debt reduction achieved in the second half of fiscal 2016 has lowered breakeven costs and created a substantial buffer for the company to maintain leverage metrics at adequate level for its rating, even under lower iron ore scenarios.

Foolish takeaway

Slashing production costs after ramping up to around 167 million tonnes annually has meant Fortescue is generating significant cash flow – and we could see the company repaying even more of its debt in the second half of this calendar year.

No wonder the share price has almost doubled this year alone.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.