Record iron ore production

IRON ore producers Portman, Mount Gibson Iron and BHP Billiton Iron Ore have released production results from operat-ions in Western Australia, post-ing some record results amid higher iron ore prices negotiated in the June quarter.While the strong profits were expected, a concern for the producers has been higher mining and infrastructure costs, dampening to some extent the positive effect of higher prices on profit margins. Portman reported record quarterly and half year net inc-ome, but infrastructure development had experienced “some cost and time pressures”, the company said. Reporting quar-terly shipments of 1.38 million tonnes from its Koolyanobbing project, near Southern Cross, with more than 280,000 tonnes produced from its Cockatoo Island operation, Portman said it exceeded its expectations for the period.Supporting this, Portman said, was an expansion of the company’s Esperance Port infrastructure, including the construction of a fourth storage shed at the port, delivery of additional ore wagons and confirmation of a rail siding construction program. The Perth-based company said sales revenue increased $41.9 million in the June quarter and $61.9 million in the half year to June 30, as the full effect of the price increase was realised. However, partially offsetting this was increased production costs, reflecting higher mining costs and royalties, the junior producer said.During the quarter, an offer from Cleveland Cliffs for the company expired, with the US-based firm’s ownership ending up at slightly more than 80 per cent.Mount Gibson announced a first full year profit from its Tallering Peak open cut iron ore operations, near Mullewa, of $23.6 million for the year ended June 30. This came from iron ore sales of 1.84mt.Mount Gibson said the benefit of the sub-stantial price rise for iron ore in April was reflected in operating profit of $12.7 million from the Tallering Peak oper-ation for the last quarter, on ore sales of 415,000t. With improving rail operating efficiency and a recent commitment by the track network owner to upgrade the track to cope with planned tonnages, Mount Gibson said it will bring forward prod-uction at its second mine at Mt Gibson by the first quarter of 2007. The estimated initial production at the site is exp-ected to 1.5mt of iron ore a year, moving to 4.5mt a year within 18 months of commencement of mining.Mount Gibson managing director Brian Johnson said the company’s operations should settle into a pattern of reasonable predictability of production and profits.The junior’s next planned development is an intended 5mt a year Extension Hill mine, to be esta-blished with Chinese partners. BHPB’s production for the year ending June 30 was a record 96.7mt, 15 per cent higher than the previous year, the company said. This increase reflected the completion of several expansion projects at WA iron ore operations, underpinned by continuing strong customer demand, the resources giant said.Production for the June quarter was 25.3 million tonnes, 23 per cent higher than the June quarter and 5 per cent higher than the March quarter.

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