FMG not keen on BC's ore | The West Australian

FMG not keen on BC's oreThe West AustralianFri, 4 March 2016 1:00PMCamera IconThe iron ore stockpiles at Nullagine. Credit: Peter Klinger/The West Australian.Share to FacebookShare to XEmail

UsCopy the Link UPDATE 1.55pm: Fortescue Metals Group has declined to buy low-grade iron ore from its Nullagine joint venture with BC Iron given the weak iron ore price.

BC and FMG were forced into a staged suspension of its operations at Nullagine in December because of falling ore prices but had agreed to a trial whereby low-grade ore from stockpiles would

be hauled to Christmas Creek and sold to FMG.

“The trial which was for 200,000 wet metric tonnes of low grade ore is now complete and Fortescue has notified the Nullagine that, at this stage in its mine plan, it does not wish to

purchase low grade ore on an ongoing basis,” BC Iron said in a statement.

BC said it still had 11 million wet metric tonnes of low-grade ore stockpiled at Nullagine, which it said could be blended with direct shipping ore in future operations.

The joint venture would also monitor the potential for beneficiation opportunities that could produce a direct shipping ore product or re-engage with Fortescue if the opportunity presented.

BC said it was implementing further changes to reflect temporary suspension of all joint venture activities including demobilisation of remaining contractors from the site and a further

reduction of overheads

“The Nullagine joint venture continues to work on opportunities to lower the operating cost base and is monitoring market conditions,” the company said.

BC Iron said it continued to generate positive cash flow from its Iron Valley project, which was operated under agreement by Mineral Resources.

It said MinRes was considering lifting the production rate at Iron Valley from 6mtpa to 16mtpa via a proposed bulk ore transport system.

BC Iron also said it had been working on improving the economics of its proposed Buckland project by reducing capital and operating costs and considering alternative development concepts, as

well as collaboratively progressing approvals for the port at Cape Preston East with the Pilbara Ports Authority.

BC shares were off 1.5 cents, or 10.71 per cent, to 12.5 cents at the close while FMG shares were up nine cents, or 3.75 per cent, to $2.49.

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