Flinders slashes jobs, attacks FMG

Iron ore aspirant Flinders Mines has cut jobs and restructured the mining plan at its Pilbara Iron Ore project.

The company said yesterday nine people were made redundant in a bid to curtail its project and administrative costs.

As the mining sector in WA continues to reorganise to become more cost effective, Flinders is following the trend to become more appealing in a ‘changing’ iron ore market.

Flinders chairman Robert Kennedy ripped into Fortescue Metals Group yesterday, blaming CEO Nev Power for lack of cooperation in the conflict over Pilbara infrastructure.

According to The West Australian, Kennedy added Fortescue has refused to cooperate with Flinders and other junior companies although it has publicly said it is willing to discuss sharing its rail line.

“I’ve seen New Power’s comment that the juniors should be talking to them (Fortescue), well we are trying to, but that is proving very difficult,” Kennedy said.

“We certainly can’t get any traction on a sensible basis, and at the moment we can’t even get to first base (in the negotiations).

“We’re in the position that Fortescue was in when it tried to get on BHP Billiton’s rail line, only the shoe is on the other foot now for Fortescue. There’s no transparency and openness.”

Flinders did not return calls for a comment at the time of publication.

Flinders’ five million tonne per year Pilbara project is stalled unless it can seek an infrastructure solution.

Flinders clinched a binding, non-exclusive memorandum of understanding with four Chinese mills in March.

The contracts meant the Pilbara mining project was a step closer to reality.

Flinders mines recently blasted Fortescue’s infrastructure arm for being secretive over its costing details.

Flinders and Brockman Mining made a submission to the Economic Regulation Authority saying TPI’s ‘lack of transparency’ meant challenging its costing structure was difficult.

They are waiting for a response on the use of Fortescue’s 280km line.

Fortescue subsidiary The Pilbara Infrastructure submitted its costings for the line last month.

Kennedy said his company’s Pilbara Iron Ore project has a new mine plan for a more competitive strip ratio.

“We did the update basically to let our shareholders know that we’re not just sitting here, we’re actually doing things,” he said.

“With the job losses, well, we’re trying to be as frugal as we can, but also progress the project.”

Kennedy said the mine plan will slash the capital expenditure of the $1.1 billion project, but he did not reveal by how much.

The news had a positive effect on the shares in a bear market yesterday, jumping 0.3c to 3.2c.

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