New contract to lower costs - BC Iron
PERTH (miningweekly.com) – ASX-listed iron-ore miner BC Iron is expecting to save between A$2/t and A$3/t in C1 cash costs at the Warrigal hub, at its Nullagine joint venture (JV), in Western Australia, following the award of a A$40-million mining, crushing and screening contract to fellow-listed Viento Group.
“Our contracting strategy is key to our 2015 cost reduction efforts and it is pleasing to achieve meaningful savings for the Warrigal hub,” said MD Morgan Ball on Wednesday.
The contract would provide for the mining, crushing and screening of two-million tonnes a year of Warrigal ore, for a period of two years, starting in April.
Viento would provide and operate load, haul, crushing and screening equipment, and would operate a second-hand surface miner that the JV would purchase from iron-ore giant Fortescue for A$1.8-million.
The contract was expected to result in reduced operating charges on site, and BC Iron reported that if these savings could be translated to other mining areas in the second half of 2015, it would equate to overall savings of between A$4/t and A$6/t, or a 15% to 20% reduction in the Nullagine mine site costs.
For the interim period though, the Nullagine project’s free-on-board C1 cash costs were expected to reach between A$47/t and A$51/t, while all-in cash costs were expected to reach between A$53/t and A$57/t.
The Nullagine JV was expected to spend between A$13-million and A$16-million in capital expenditure during 2015, notwithstanding the purchase of the second-hand surface miner.
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