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NEWS
BC Iron steeled for the future
BC Iron Ltd remains committed to de- cided that even if the iron ore price goes reported breakeven price of $US42-44/t.
veloping iron ore projects despite di- up, it is very unlikely we would get agree- Vorster, who merged his Iron Ore Hold-
versifying into other commodities under ment from our JV partners to reopen the
new managing director Alwyn Vorster. mine in the current format,†Vorster told ings into BC Iron in mid-2014, knew upon
Paydirt. his arrival he had to undertake a diversi-
Vorster has spent the past 10 months fication strategy for his new company to
since joining the company exploring op- “So, it was decided the asset was best survive at the bottom of the cycle.
tions in potash, salt, gold and base met- suited to sit with Fortescue whereby they
als in a move aimed at becoming less can make the decisions as to where it fits “Pure iron ore junior companies like BC
dependent on a single commodity. into their mine plan and when it fits into Iron, Atlas [Iron Ltd], Grange [Resources
their mine plan. And if they make the de- Ltd] and to a certain extent Mt Gibson
BC Iron was once an ASX200 compa- cision to re-open it, then BC Iron will still [Iron Ltd] don’t necessarily have tier one
ny after putting its Nullagine project into get some benefits via the royalty stream assets; we probably have tier two and tier
production and operating the Pilbara- that we agreed.†three assets due to the affordability in the
based mine in conjunction with JV part- iron ore space,†Vorster said.
ner Fortescue Metals Group Ltd. Iron ore hit a three-year high of $US94/t
in February, but has since slid back down “These tier two and three assets are
However, low iron ore prices forced BC to around $US65/t at the time of print, as normally quite high cost as well, so when
Iron to shut the mine in December 2015 a surge of supply hits the market and there is a downturn it hits us more dra-
and the company ultimately decided to massive stockpiles build up at Chinese matically than what it hits the majors…so
offload its 75% stake in the mothballed ports. it’s very unlikely the BC Irons, the Atlases
operation to Fortescue late last year. and the Granges of the world can actu-
BC Iron suspended operations at Nul- ally get to a space where we can com-
Vorster said limited ore reserves, ma- lagine when the iron ore price dropped pete on cost.
jor environmental rehabilitation obliga- below $US40/t, but resisted the tempta-
tions and a heavy reliance on rail and tion to turn the mine back on when things “After months of consultations with key
port charges to Fortescue all contributed improved due to concerns around long- shareholders and stakeholders, we set
to the decision to part with Nullagine. term stability. the vision that said we are committed to
iron ore – it is in our DNA and it’s what
“Those three factors weighed heavily This was despite Nullagine having a made the company – but we are going
on our minds and in the end it was de-
PAGE 10 MAY 2017 AUSTRALIA’S PAYDIRT
