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[Ferro-Alloys.com] Fenix has acquired the Mid-West iron ore assets of fellow West Australian (WA) iron ore firm Mount Gibson, as sustained weaker prices forces consolidation among the more marginal producers.
Fenix used hedging to help it maintain production through weaker periods that followed the mid-2021 price spike, while other marginal firms were forced to mothball operations. This included, but was not limited to, Mount Gibson that closed its 1.5mn wet metric tonne/yr Shine operation in the Mid-West in October 2021 after just three months.
The rally in prices earlier this year saw some marginal producers look to restart but rising costs and the easing of prices through April-May scuppered most plans.
Fenix plans to use Mount Gibson's rail and port infrastructure to cut costs by around A$5/t, along with its 15mn t of iron ore resource to allow for production growth. Mount Gibson, which operates the high-grade Koolan Island mine offshore WA, will retain some exposure to the Mid-West by taking an 8.6pc stake in Fenix as part of the deal.
The Argus ICX iron ore index was last assessed at $115.35/dry metric tonne (dmt) cfr Qingdao on a 62pc Fe basis on 28 June, down from a recent high of $133.40/dmt on 15 March. argusmedia.com
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- [Editor:kangmingfei]
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