Pilbara project hit by $US1bn impairment

Iron ore miner Citic Pacific will cop a write down of up to $US1 billion on its Sino Iron magnetite operation in the Pilbara, less than a year after the facility completed commissioning.

Reporting to the Hong Kong stock exchange, the company said despite the recent uptick in the price of iron ore, longer term analysis suggested the steel making commodity would not sell for as much as hoped.

That meant an impairment of $US800 million to $US1 billion would be made on its 2016 accounts.

About 11 million tonnes of concentrate was exported through the project in 2016, as the sixth and final processing line entered production. 

The project cost an estimated  $10 billion, however, Citic took a $US2.5 billion write-down on the project two years ago. It is estimated to be five times over budget and started operating several years behind schedule.

Moving forward, Citic said it would need the cooperation of all stakeholders to keep the mine viable.