And so the great iron ore junior wind-down begins, from The Australian:
Iron ore miner and steelmaker Arrium has said it has been forced to shutter one of its mines due to the sharp fall in the price of the commodity.
Arrium said it would “mothball” its higher-cost Southern Iron operation in South Australia by the end of June and focus its efforts on its lower-cost Middleback Ranges operation.
The move means it will now target around 9 million tonnes per year of iron ore sales, down from current annual production rates of around 13 million tonnes. Mothballing an asset means production ceases but operations are kept in a sufficient condition to be fired up again if required.
Arrium said the move would also reduce its overall iron ore production costs by 20 per cent to an average of $57 per dry metric tonne in the 2016 financial year, down from around $71 in the 2014 financial year.
Lol, care and maintenance, right. More at the AFR:
It also flagged asset write-downs of $1.33 billion, the vast majority of which will apply to its iron ore business.
The Southern Iron operation was pivotal in the company’s recent strategy to broaden its operations beyond being a vertically-integrated steel producer, to become a major iron ore exporter as well.
The strategy also precipitated the change of name from OneSteel to Arrium.
You’ve got to hand it to ARI management. They’re less deluded than everyone else. Back to Onesteel, then.
