Mount Gibson Iron has announced a life-of-mine off-take agreement with commodity producer and marketer Glencore International for hematite iron ore from its Extension Hill mine in the Mid West.
Under terms of the deal, Glencore will purchase 48 per cent of life-of-mine production from Extension Hill, equivalent to 1.44 million tonnes at production rates of 3mtpa.
Pricing wil be referable to a market-based clearing mechanism using Platts indices.
Mount Gibson managing director Luke Tonkin said he was pleased to have successfully concluded negotiations with Glencore.
“Glencore is a significant sophisticated international trading participant in the seaborne iron ore trade who has underlying balance sheet strength and transaction reach,” Mr Tonkin said in a statement.
“With this agreement in place, nearly half of Extension Hill production is under contract and we anticipate concluding further agreements in respect of the remaining unallocated tonnages shortly.”
At 12:10PM (WST) Mount Gibson’s stock had dipped slightly, down 1.4 per cent to $1.64.
