BC Iron cutting costs in the face of low iron ore price

BC Iron said it will continue to cut costs and make pragmatic decisions as the iron ore price bites into the miner’s breakeven costs.

 BC said it received an average price of $US54 per tonne for its iron ore during the March quarter, compared to all-in cash costs of $A57 per tonne.

The company said it lowered its costs during the quarter to $A52 a tonne and expects this to fall by $2 to $3 per tonne.

In production, the Nullagine Joint Venture produced 1.77 Mt of ore, a 68 per cent increase on the previous corresponding period.

This resulted in increased shipping rates with the miner exporting 1.46 Mt of iron ore, a 20 per cent increase on the previous corresponding period.

BC said both mining and crushing and screening achieved a run-rate of 7Mtpa during the quarter, with NJV now in a strong inventory position with total stockpiled of 0.53 Mt.

The Iron Ore Valley mine is being operated by MIN under an iron ore sale agreement with BC Iron. It is currently being operated as a DSO, truck haulage operation. During the quarter MIN shipped 0.85 Mt of Iron Valley ore, generating EBITDA for Bc Iron of $2.9M.

BC said MIN is currently evaluation a range of initiatives aimed at enhancing the long-term viability of the Iron Valley operation in a low iron ore price environment.

One of these initiatives includes the beneficiation of Iron Valley ore to increase the iron grade from 58 per cent to over 62 per cent.

Commenting on the quarter, BC’s managing director Morgan Bell said market conditions remain challenging for iron ore producers.

“BC Iron is underpinned by a strong balance sheet with A$107.5 million cash, an improving cost position at Nullagine and ongoing cash flow from the Iron Valley operation,” Bell said.

“However, we are very cognisant of the external environment and will continue to make appropriate pragmatic decisions.”

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