BC Iron Limited has announced that it is temporarily suspending the production of Direct Shipping Ore (DSO) at the Nullagine Joint Venture (NJV) operation due to the ongoing and material fall in iron ore price.
The Nullagine Joint Venture (NJV) is an unincorporated 75:25 joint venture between BC Iron and Fortescue Metals Group, which is located approximately 150km north of Newman in the Pilbara region of Western Australia.
BC Iron said that the decision to suspend the production at the NJV was inevitable despite the fact that it achieved substantial material and cost reductions in recent times in an effort to avoid such outcome.
“Whilst this has been a difficult decision for the Board, we have consistently advised that our primary focus at BC Iron is to create value for our shareholders,” said BC Iron Managing Director, Morgan Ball.
“BC Iron is a price taker and unfortunately, despite the commitment and achievements of all BC Iron staff and contractors to successfully reduce our cost base, the iron ore market is such that we have had to make this decision.”
According to the press release by BC Iron, the suspension will be managed “such that if the BC Iron Board and Fortescue decide there is an appropriate change in external market conditions in the future”, then DSO operations will be able to be efficiently recommenced.
“I would like to thank our joint venture partner, Fortescue, for their strong contribution to the success of the NJV over the last 5 years of operations and also the Western Australian Government for its willingness to work with and support the resources industry,” Mr Ball added.
“Most importantly, I thank all of our committed employees and contractors who have worked so hard to build the NJV to a 6Mtpa operation and worked even harder again during the last 18 months to maintain BC Iron’s competitive position in a very challenging market.”
The suspension of DSO operations at the NJV will occur progressively and are expected to be finalised in January 2016.
BC Iron said its other iron ore projects, namely Iron Valley and the Buckland mine and port development project in the West Pilbara, remain unaffected.
