PERTH (miningweekly.com) – Iron-ore miner BC Iron on Thursday announced that it would decrease capital expenditure (capex) at its Nullagine joint venture, with miner Fortescue Metals, by about A$10-million during 2015.
The miner said that capital spend at the project would now range between A$13-million and A$16-million in 2015, instead of the previously estimated A$23-million to A$26-million.
The reduction in capex followed a number of other measures implemented by BC Iron to reduce costs, including terminating a higher-cost road haulage contract and a number of consultancy contracts, as well as implementing redundancies at the Nullagine mine site and at the company’s head office.
Three of the company’s nonexecutive directors have also resigned, including founder Mike Young, while the remaining directors have agreed to a 10% pay cut.
“We have had to make a number of tough business decisions recently, but our strong focus on reducing operating costs and capital expenditure is a critical part of managing our business in the current iron-ore price environment,” said MD Morgan Ball.
He noted that the company would continue to implement further cost saving initiatives, including a potential decrease in near-term strip ratios through the deferral of higher strip ratio mesas at the Nullagine project, and the tendering of a discrete mining contract for the Warrigal hub.
The iron-ore miner was hoping to achieve an all-in cash cost of between A$54/t and A$61/t during the remainder of the 2015 financial year, while cash costs would likely reach between A$47/t and A$51/t.
Meanwhile, the Nullagine project again reached a run-rate of six-million tonnes a year during November, after the miner encountered additional clays at the project area, affecting production in the September quarter.
A number of operational adjustments were implemented to manage this issue.
For the full 2015, the Nullagine project was expected to deliver between 5.2-million and 5.6-million tonnes of ore.