Roy Hill has confirmed it will miss its earlier set date for shipment.
“For projects of this scale and complexity it is not unusual for minor slippages such as this,” a Roy Hill spokesperson explained.
While many predicted a 21 October shipment date, the miner has no confirmed that it will occur after this date.
While no date has been firmed for the first shipment, The West stated that it may be as late as nearly mid-November.
Some have pointed to the volatile, and overall weak, iron ore price as the driver of the delay, and that Roy Hill bringing additional supply into an already flooded market will likely further degrade the price.
Morgan Stanley broke down the numbers, noting, “Fortescue Metals has reached its target of 155Mtpa; there’s more new supply coming from Rio Tinto (315Mtpa in 2015, going to 360Mtpa); BHP Billiton (260Mtpa in 2015, to +270Mtpa); Vale (344Mtpa in 2015, to +400Mtpa); and Roy Hill starts exports this month [although this is now in doubt].”
However Roy Hill executive director Tad Watroba has rejected this belief, and the painting of Roy Hill as the impetus for a continued weak iron ore price.
“Some media have got it wrong and are overstating the impact on the iron ore price from the Roy Hill project,” Watroba stated.
He went on to state that around 90 per cent of Roy Hill’s product is already under long term contract, so little of this will actually enter the spot iron ore market.
“The fact is Roy Hill was not in the market when the iron ore price crashed last year or continued to drop this year, and won’t be shipping 55mtpa next year as it continues to ramp-up production.”