Had to come:
Cleveland-Cliffs will make the last shipment of iron ore from its Koolyanobbing operations near Southern Cross by the end of June with the potential loss of hundreds of jobs.
Cliffs formally notified contractors yesterday that it would wind down the 11 million tonne-a-year iron ore business by June 30, which provides work at the mine, along the railway and haulage route and at the Port of Esperance.
The US miner flagged in January the operations would close by the end of the year, blaming declines in profit caused by growing discounts from Chinese buyers for its lower-grade iron ore.
But the end has come sooner than expected, with Esperance Port operator Southern Ports informing employees yesterday that Cliffs had given it notification of the closure date.
Southern Ports chief executive Nicolas Fertin described it as a “big change”.
“As a result, the confirmation of this action will result in a big change not just to the port, but to the broader Goldfields-Esperance community,” he said in a memo to staff. “Our priority is to support our employees.
“As soon as we can, we will communicate directly with you to advise how this change will impact you, and the broader workforce.”
This will not be the last low grade iron ore mine to close this year. 58% ore is still trading at more than -40% discounts to benchmark (depending upon which measure you use). Given my forecast for 62% is $50 by mid-year, that means 58% could crash below $30.
