Mount Gibson off-take agreement with Chinese falls through

The Extension Hill site, 3km from Iron Hill

Mount Gibson Iron has terminated an off-take agreement with Xinyu Iron and Steel Group because the Chinese partner did not comply with the terms of the arrangement.

Perth-based Mount Gibson, which owns the Iron Hill project in Western Australia’s Mid West region, is now free to offer the production previously committed to Xinyu to alternative customers. Mount Gibson also has rights to pursue Xinyu for any resulting losses.

“Ther termination follows Xinyu’s failure to comply with a fundamental term under the off-take agreement,” the company said in an ASX announcement.

“Mount Gibson has already successfully sold Iron Hill material into the spot market, and fully expects to continue to place all production from Iron Hill with customers as it becomes available.”

According to a November 2016 ASX statement, Xinhu committed to buy about one quarter of the first year of production from Iron Hill under the off-take agreement.

Mount Gibson launched development of the Iron Hill project in the first quarter of 2017 after securing final approvals for the iron ore operation.

Iron Hill is about 3km south of the company’s now depleted Extension Hill open pit mine.