Redundancies and cuts to directors’ fees have helped BC Iron secure cost reductions at the Nullagine joint venture.
Redundancies and cuts to directors’ fees have helped BC Iron secure cost reductions at the Nullagine joint venture.
The company said it had reduced C1 cash costs by $2-3 per wet metric tonne at the operation, which is 25 per cent owned by Fortescue Metals Group.
Guidance for BC’s C1 cost for the remainder of the financial year is $47-51/wmt, while its all-in cash cost, which includes royalties and corporate costs, is projected to be $54-61/wmt.
The spot price of iron ore is just below $70 per tonne, after a rapid descent this year.
Board members have accepted a 10 per cent fee cut.
That follows the resignation of three members late last month, also to reduce costs, including long-serving boss Mike Young.
A similar strategy was adopted by Atlas Iron, with a 15 per cent reduction in director remuneration.
BC said other key measures had included proactive assessment of the mine plan, termination of a high-cost road haulage contract, and termination of consultancy contracts.
The miner will also cut capital expenditure by around $10 million, to be in the range of $13 million to 15 million.
But sales guidance was reaffirmed to be between 5.2 million and 5.6 million wet tonnes, with two new parts of the mine expected to start production in the March quarter.
The company said it had increased its annualised run rate to 6mt per annum in November, after encountering additional clays at the site had affected production and costs in the September quarter.
BC Iron managing director Morgan Ball said the company's mine was once again performing strongly.
"We have had to make a number of tough business decisions recently, but our strong focus on reducing operating costs and capital expenditure is a critical part of managing our business in the current iron ore price environment," he said.
BC Iron was up 3.8 per cent to 41 cents per share at the time of writing.
