Margins no reason to brake

IN SPITE of tightening margins, Robe River Iron Associates continues to maintain its current high rate of output from its iron ore operations in the Pilbara.

Last year, the company’s Pilbara-basd Cape Lambert operation shipped just over 30 million tonnes of iron ore and this year output is only down slightly.

While North Limited’s third quarter production and financial report noted a 14 per cent improvement in earnings from higher sales, reduced prices for iron ore will apply – and begin to bite – from the beginning of April.

North Limited managing director Malcolm Broomhead said sales volume will meet 1998-99 expectations of 29 million tonnes.

Commenting on the company’s widespread mineral mining operations, he said: “The poor third quarter outlook resulted primarily from a sharp fall in volumes from IOC (Iron Ore Company of Canada) and low commodity prices across all businesses.

“IOC made a loss which reflected a 44 per cent reduction in sales revenue due to imports of cheap steel products into North America in addition to the normal winter closure of the St Lawrence Seaway and the Great Lakes system.”

Mr Broomhead anticipated that production would improve in the fourth quarter.

But the company is taking no chances and has announced a planned cost and efficiency initiative focusing on saving $130 million annually.

North acquired IOC a couple of years ago to give the company control of a world class asset and an opportunity to enter new markets with a broader range of iron ore products.

The mine is located at Carol Lake in the west of Labrador, in the province of Newfoundland.

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