Grange Resources has announced it will dramatically reduce spending and slash jobs at its Southdown magnetite iron ore project near Albany, the latest victim of continued uncertainty in commodities circles.
Grange managing director Richard Mehan today said that high development costs, difficult financial markets and uncertain conditions had conspired to force the company to slash costs at Southdown, with the company set to spend only $2.5 million at the project next year.
Mr Mehan said the majority of the project manager’s 24 staff and contractors would be made redundant before the end of the year.
“The project has achieved a number of significant milestones including completion of a definitive feasibility study, delineation to reserve status of a major ore body capable of producing extremely high grade concentrate, cost effective non-process infrastructure solutions and all primary environmental approvals,” Mr Mehan said.
“On this basis the project is able to quickly move to the development phase when market and cost environments are more favourable.
“All tenements, permits and project assets will be maintained in good order until that time.”
At close of trade today, Grange shares had fallen by 2.2 per cent, trading at 22 cents.
Grange holds a 70 per cent stake in the Southdown project, with joint venture partners Sojitz Corporation and Kobe Steel holding the remaining 30 per cent.