News and Events

Australian iron ore mining firm CuFe will suspend operations at its JWD mine in Western Australia (WA), as rising costs and lower iron ore prices force another marginal producer in the state to stop exporting. CuFe joins Strike Resources, GWR, Venture Minerals and Mount Gibson in closing mining operations because they are unprofitable, particularly given high haulage costs driven by firmer diesel prices. CuFe used hedging to offset falling prices but that coverage is ending, prompting it to halt mining. The firm will continue crushing and screening mined ore and haul it to port for shipment in December. It plans to maintain as much of the key mining equipment and infrastructure on site to allow it to restart JWD when the market requires. "I have seen many times how iron ore prices can rebound quickly once sentiment turns in China," said CuFe director Mark Hancock. "Stock levels of iron ore at Chinese steel mills are at the lowest level for nearly a decade on a days of consumption basis, so as sentiment improves restocking is likely to be required." Fenix is one of the few small-scale iron ore mining firms still operating in WA. It shipped 223,000 wet metric tonnes (wmt) of 62.2pc Fe fines and 138,000t of 64.3pc Fe lump from its Iron Ridge mine during July-September compared with 204,000wmt of fines and 141,000wmt of lump for April-June. Fenix has survived because it produces high-grade iron ore, has lower costs than its peers and hedges its iron ore sales. It had 50,000 t/month of sales hedged at A$230.30/dry metric tonne (dmt) ($148/dmt) for the 12 months to 30 September, along with 35,000 t/month at A$180.65/dmt for the nine months to June 2023. It operated on a cash margin of A$26/dmt during July-September, with average cash costs of A$84.14/wmt and a realised price of A$115/dmt. Mining conglomerate Mineral Resources is also still operating. But it has indicated that it will cut mining capacity and look at options to increase the grade of its ore sales to try to remain profitable. The larger WA mining firms — BHP, Rio Tinto and Fortescue — all operate near the bottom of the cost curve and tend to maintain production through the pricing cycle, with only growth projects affected by low prices. Argus ICX iron ore was last assessed at $80.40/dmt cfr Qingdao on a 62pc Fe basis on 28 October, down from $120.65/dmt on 27 June and $160.20/dmt on 7 March. It has not been this low since January 2019.