Australia’s Mount Gibson expects iron ore sales to slip in 2018-2019

Australian iron ore miner Mount Gibson said Wednesday that it is expecting sales of its product to ease in fiscal 2018-2019 (July-June), and for all-in group cash costs to rise, as it wraps up production from its Mid West operations and prepares to restart the high grade Koolan Island project.

The miner has given iron ore sales guidance for the current fiscal of 2.7-3.3 million wet mt, which compares with actual sales of 3.6 million wmt in fiscal 2017-2018. All-in group costs are pegged at A$52/wmt-A$57/wmt ($37.56/wmt-$41.17/wmt) FOB, up from A$45/wmt in the last fiscal, it said.

Mount Gibson is planning to complete mining at its Mid West business later this year, and commence ore sales from its Koolan Island project in January-March next year.

Shipments from the Mid West operations, which include Iron Hill and Extension Hill, are expected in the March quarter next year, while the Koolan Island project is over 80% complete and scheduled to start sales in the same quarter, the company said.

The miner expects the average grade of Koolan iron ore to be 65.5% Fe, which compares to Iron Hill, which typically sees a grade around 59% Fe for its standard direct shipping ore fines.

Almost 70 million mt of high grade (67% Fe) iron ore was mined by BHP from Koolan Island from 1959 to 1993. Operations were suspended in November 2014 following a seawall failure, which resulted in the flooding of the main pit.

Site cash cost guidance for the Mid West operations for 2018-2019 is A$38/wmt-A$42/wmt against Koolan Island, which is A$70/wmt-A$75/wmt.

Source: S&P GLOBAL PLATTS