Iron ore miners in the Pilbara are on track to reach production and shipping targets, despite bad weather hampering operations and affecting some December quarter results.
The price of iron ore may rise and fall at the whim of the market, but export tonnages from WA’s ports continue to grow.
Iron ore miners in the Pilbara are on track to reach production and shipping targets, despite bad weather hampering operations and affecting some December quarter results.
Atlas Iron, which planned to ship between 9.8 million tonnes and 10.3mt this financial year, increased its full-year guidance to 10.2mt-10.7mt last week following a record half-year sales result.
The news emerged as the iron ore miner appeared to be making progress with a railway agreement that could lead to an increased shipping capacity of 46.5mt per annum.
Atlas managing director Ken Brinsden said discussions with a third party about a rail haulage agreement were “proceeding towards finalising an agreement”, but he couldn’t elaborate because of confidentiality arrangements.
Atlas transports ore to Utah Point port by road, but a rail solution would make it economically viable to progress more deposits and pursue its medium-term sales goal of 15mtpa.
It would also enable it to access its 63 per cent interest in North West Infrastructure, which has rights to a yet-to-be-built 50mtpa of export capacity at Port Hedland.
In spite of Atlas Iron’s good news, Mineral Resources still pipped it at the post, shipping 2.9mt in the December quarter, outperforming Atlas Iron (2.7mt), Mount Gibson (2.5mt), and BC Iron (1.5mt).
Mineral Resources is on its way to dramatically increasing its sales this year, having already produced nearly as much iron ore in the first half of FY2013-14 as in the previous 12-month period.
So far this financial year, MinRes has shipped 5mt of its full-year target of 8mt, mainly due to expansion of its Carina mine and early ramp-up from its Phil’s Creek mine, which started producing in late 2012.
The three majors – Rio Tinto, BHP Billiton Iron Ore, and Fortescue Metals Group – have all confirmed they are on track to meet ambitious new sales targets made possible by mine and port expansions.
Rio Tinto announced record iron ore production and shipments in its December quarter report.
Rio has produced 130mt of ore during the past six month, putting it on track for production of 266mt this financial year, based on December quarter results.
Rio has set a 360mtpa export target by 2017, up from its 330mt target by 2015.
Like several other producers, Rio relied on stockpiles to increase the amount of iron ore it shipped above this quarter’s production figures.
Its Pilbara shipments exceeded production by 2mt in the December quarter (shipping 68.8mt), despite Cyclone Christine closing the ports for the last three days of 2013.
BHP Billiton has set a goal to increase shipments to 270mtpa, but has not announced a deadline for when that amount will be achieved.
In the first half of this financial year it has achieved a record production of 108mt, on track for total annual production of 184mt based on the December quarter.
BHP’s ramp up has been largely due to first production from its $US3.4 billion Jimblebar mine.
FMG used its December quarter announcement to reiterate its commitment to expanding to 155mtpa.
FMG shipped 51 per cent more iron ore over this financial half year than the prior comparable period, notching up 53.9mt sold so far of this financial year’s goal of 127mt.
FMG director of developments Peter Meurs said the company was focused on ramping-up and running smoothly at 155mt first, at which point it would expand incrementally with projects that had very low capital costs.
Beyond that, Mr Meurs said, FMG would only look at larger expansion opportunities if its balance sheet allowed for it and the market was right.
Smaller players Mount Gibson and BC Iron have both flagged steady targets, with minimal expansion plans.
BC Iron has confirmed it is on track to meet its 5.8mt-6.2mt sales guidance for this financial year, after shipping 1.52mt in the December quarter.
BC Iron has a 75 per cent controlling stake in its Nullagine joint venture with FMG.
Cyclone Christine reduced production in the December quarter, causing it to drop 16 per cent compared to the previous quarter, but BC Iron managing director Morgan Ball said a healthy stockpile allowed it to meet its target shipping rates.
Mr Ball told Business News that BC Iron’s deal with FMG to access its port and rail was limited to 6mtpa, and it was not planning any expanded production unless it could increase its access agreement with FMG.
Mount Gibson’s December quarterly results have shown a record six months of sales are likely to lead to it achieving its full-year sales target of 9mt-9.5mt this financial year.
Mount Gibson has been drawing on stockpiles recently due to lower production from weather interruptions and reduced truck availability.
One of its three mines, Tallering Peak (which has a maximum 3mtpa capacity), will cease production in the middle of this year, which is expected to result in a dip in next financial year’s production.
With an agreement to acquire an advanced resources site, Shine, from Gindalbie Metals, eventual production is expected to offset some of the loss of Tallering Peak.
While Shine is forecast to have a 6mt mine capacity compared with Tallering Peak’s 20mt capacity, Mount Gibson is also planning on ramping-up production at its Koolan Island mine to 4mtpa, from the usual 3mt-3.5.
