BC Iron to halt iron ore operations at Pilbara mine

By Carolina Curiel (ScrapMonster Author)

December 11, 2015 05:53:05 AM

CANBERRA (Scrap Monster): Perth-based junior miner BC Iron has decided to temporarily shut the Nullagine joint venture iron ore mine. The production of direct shipping ore at the mines will be suspended until further notice. The company decision is on the back of falling iron ore prices amidst continued weak Chinese demand for the steelmaking raw material. The decision is feared to affect hundreds of jobs, reports noted.

According to company press release, it had successfully implemented several cost-cutting measures at the Nullagine joint venture. However, the continued decline in iron prices, especially during the last two weeks, has made it unprofitable for the company to operate in its current form. Consequently, the company has decided to suspend production operations in December and January. Incidentally, iron ore prices have slipped to sub $40 levels, thus touching fresh 10 year lows.

Morgan Ball, Managing director, BC Iron applauded the commitments and achievements of all its employees and contractors to reduce the operating costs substantially during difficult times. However, the plunging commodity prices have left with no option other than to suspend the operations temporarily. The mine may return back to operations, subject to noticeable improvement in market conditions, Ball added.

Details with respect to job losses are not yet known. BC Iron has almost 30 direct employees and around 200 contract workers at the Nullagine operations. In addition, the company also has nearly 30 head office employees in Perth.

The Nullagine Joint Venture (NJV) is an unincorporated 75:25 joint venture between BC Iron and Fortescue Metals Group (Fortescue), which is located approximately 150km north of Newman in the Pilbara region of Western Australia. The NJV is a producing iron ore mine with the capacity to export up to 6Mtpa of product. BC Iron is the operator and manager of the joint venture and Fortescue facilitates the export of iron ore via both its rail and port infrastructure, and the provision of marketing services.