30/01/2015 - 10:33

MinRes rails against port charges

30/01/2015 - 10:33


Upgrade your subscription to use this feature.

Mid-tier iron ore miner Mineral Resources has criticised port charges after digging into its stockpiles to export 2.8 million tonnes in the December quarter.

MinRes rails against port charges
Mineral Resources managing director Chris Ellison

Mid-tier iron ore miner Mineral Resources has criticised port charges after digging into its stockpiles to export 2.8 million tonnes in the December quarter.

MinRes, which aggressively pursued increased exports to 10.4mt in the 2013-14 financial year, an increase of 93 per cent, will present its financial report for the December quarter in February.

Managing director Chris Ellison used its latest activities report to criticise the state government and port authorities over charges for the use of the Kwinana Bulk Terminal 2 and Port Hedland’s Utah Point, where its Yilgarn and Pilbara operations export from.

“The current port charge regime is not sustainable and this needs to be addressed by the WA government and the port authorities,” Mr Ellison said in a statement.

While he welcomed the state government’s deferred iron ore royalty payments scheme, which was offered to provide smaller miners some relief, Mr Ellison said port charges were its most significant cost area yet to be resolved.

A halving in iron ore prices over the past 12 months, currently trading around $US63 per tonne, will have had a substantial negative effect on MinRes’s revenue, as it has for many others, particularly the smaller higher cost producers.

Mr Ellison said the miner had found some relief from the low iron ore price in the form of lower fuel prices and a lower Australian dollar.

He said it had also improved operating efficiencies of its mining, crushing and hauling activites and continued to reduce costs.

Midway through this financial year, MinRes has exported 5.5mt compared with 5mt at the same time last financial year.

It produced 2.3mt in the December quarter, compared with 3.3mt in the September quarter because it ceased mining at the Phil’s Creek and Spinifex Ridge mines in the Pilbara.

It increased mining at the other Pilbara mine Iron Valley and Mr Ellison said its Carina mine in the Yilgarn region continued to perform strongly.

“The workforce is at full strength with most people redeployed from the Phil’s Creek, Spinifex and Poondano operations,” he said.

Mr Ellison confirmed the miner had appealed a December decision by the Environmental Protection Agency to classify a proposed mine in the Yilgarn as ‘environmentally unacceptable’.

He said the J5 and Bungalbin East iron ore project was in line with state government policy, which in 2010 classified the same project as a lower level conservation area not precluded to mining.

“The company is confident that its industry leading environmental practices including minimising site disturbance, locating infrastructure away from sensitive areas, back filling pits and its proven rehabilitation expertise can successfully balance environmental requirements with development,” Mr Ellison said.

The project, should it go ahead is expected to generate 1,423 jobs during construction and 1,992 jobs during operation, according to the company. 


Subscription Options