Mount Gibson to suspend W. Australia iron ore mine as prices fall

Australia’s Mount Gibson Iron Ltd said on Friday it will suspend operations at its Shine iron ore project in Western Australia to wind down expenses, following a drop in the prices of the steelmaking ingredient and rise in shipping costs.

Iron ore prices marked their first quarterly loss in two years and declined more than 40% since hitting a record peak in mid-May, hit by power shortages in China and restrictions on steel output to reduce carbon emissions.

Mount Gibson’s Shine project will continue mining and processing in October to make a shipment at the end of the month, after which operations at the site will be suspended pending “improvement in iron ore market conditions”, it said.

“This is a disappointing decision for the company given that the Shine mine is in its first year of operation,” Mount Gibson said.

“However, it is a commercially sensible decision necessary to limit cash outflows and preserve the future optionality of the Shine deposit.”

Mount Gibson also withdrew its sales outlook for Shine of about 1 million wet metric tonnes (Mwmt) for fiscal 2022. The miner is targeting group sales of between 3 Mwmt and 3.2 Mwmt for fiscal 2022.

Shares of the iron ore miner were down nearly 7% at A$0.45, as of 0023 GMT, their worst intraday drop since Sept. 17.

(By Sameer Manekar; Editing by Sherry Jacob-Phillips)