Tasmanian mine workers are likely to take another hit this year as iron ore miner Grange Resources prepares for a round of redundancies.
Despite mill refurbishments Grange Resources announced record pellet manufacture in 2015 from the Savage River mine, but the company warned that redundancies were a likely move in 2016.
A statement from the company yesterday said it had achieved “significant cost reductions” in 2015, and that it would strive for more cost reductions to fit with the current iron ore market.
“An optimisation strategy, which is expected to be completed early in 2016, is part of Grange’s overarching strategy to continue reducing costs, maximising margins and retaining free cashflow,” the company stated.
“Due to continued weakness in the iron ore price and subdued pellet demand combined with optimisation strategy, redundancies may be made.”
Last year Grange wrote down the value of the Savage River mine, soon after revealing a half year net loss of $80 million.
Iron ore prices dropped through the $40 floor late last year, and have since recovered to around $US43 per tonne.
The West Australian reported Grange shutdown the Southdown magnetite project near Albany, a $150 million investment, after predicting a “perfect storm” of iron ore price meltdown.
Grange Resources is currently trading for 9.5c per share.