Shares in Mount Gibson Iron have soared on news the iron ore miner received an $86 million property damage insurance payment for the collapse of a seawall at its Koolan Island mine in 2014.
Shares in Mount Gibson Iron have soared on news the iron ore miner received an $86 million property damage insurance payment for the collapse of a seawall at its Koolan Island mine in 2014.
But the Perth-based company is still waiting on compensation for the ‘business interruption’ component of its insurance claim, as mining had been suspended following the seawall’s collapse.
The Koolan Island mine was put on care and maintenance shortly after the seawall collapsed on the main pit, with Mt Gibson recording a $946 million impairment on the asset.
The cash settlement will be paid to the company by the end of next month.
Mt Gibson shares were up 17.5 per cent to 24 cents each at 10am.
“Proceeds from the settlement will further strengthen the company’s cash position as it continues to evaluate resource investment opportunities, including the potential to rebuild the main pit seawall at Koolan Island,” Mt Gibson said in a statement.
The company said discussions concerning the business interruption component of the insurance claim remained ongoing.
“These discussions remain in progress and it is premature to comment as to the likely outcome of this component of the claim,” it said.
Chief executive Jim Beyer said the $86 million settlement was a welcome for the company and its shareholders in the wake of the incident at Koolan Island.
“We thank our insurance brokers and advisers for their assistance in our claim preparation and negotiation, and we appreciate the diligent and systematic engagement of our insurers to achieve a timely resolution,” Mr Beyer said.
“We look forward to continuing our discussions relating to the business interruption component of our claim in a similarly constructive fashion.”
Insurance broking and risk management company Arthur J Gallagher & Company general manager mining and construction Colin Todhunter led the claim process for Mt Gibson.
“The Koolan Island seawall incident is one of several landmark WA resources sector claims that we have successfully resolved for clients in recent years,” he said.
“This outcome provides further validation of Arthur J Gallagher’s market leading value proposition and, most importantly, represents substantial recompense for our client.”
“This is one of the most technically challenging and complex claims in Australian history, involving a panel of more than a dozen specialist insurance underwriting companies from Australia, Europe and Asia.”
