Australian iron ore junior GWR has halted mining at its 1mn t/yr C4 deposit in Western Australia (WA), as a drop in iron ore prices by more than half forces more marginal production out of the seaborne market.
GWR stopped all mining at C4 for 30 days on 19 September while it monitors iron ore prices and considers its position on reopening operations. It has 172,500t of ore on stockpiles at its mine site and another 143,000t of 61.8pc Fe which has been blasted in the pit and is ready to be dug. The extent of these stockpiles reflects the speed at which prices have become uneconomic for GWR to sell iron ore.
The firm joins Tasmanian producer Venture Minerals in closing iron ore operations because of low prices, with others likely to follow suit unless there is a significant rebound in prices.
GWR continues to talk to other mining firms about mine-gate sales of the stockpiled material to be used in blending with lower-grade ores. GWR has an agreement with Macarthur Minerals for mine-gate sales and may be able to sell ore to larger iron ore producers in the Mid West region of WA such as MinRes and Mount Gibson, which have larger cash reserves to help them through this weak price environment.
GWR operated at an unaudited cash cost of A$120.30/wet metric tonne (wmt) ($88.20/wmt) fob Geraldton, WA in April-June. The firm was highly profitable in April-June at an average realised price of $185.50/dry metric tonne (dmt) fob, but profit is marginal at half that price, particularly...
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