Posted on 16 Apr 2015
China’s Sinosteel Midwest Corp said on Tuesday it will suspend iron ore production at its Blue Hills project in Australia – the second mining company to fall victim to low prices in less than a week.
The Blue Hills mine was opened in August 2013 and was originally scheduled to operate for five years, yielding a little over 3 million tonnes of ore, according to the company, known as SMC.
Spot iron ore prices .IO62-CNI=SI have fallen 60 percent over the past year following a massive rise in production, which analysts blame on overestimates of China’s appetite for imported ore by majors Vale, Rio Tinto and BHP Billiton.
SMC said delays in gaining regulatory clearance to extend the life of its mine for another two years had also contributed to the suspension, which will take effect in mid-May.
“Tough economic conditions and lengthy delays in obtaining environmental approvals for extensions to the Blue Hills operation, had left no alternatives available,” it said in a statement emailed to Reuters.
Atlas Iron said on Friday it was suspending mining rather than operate at a loss after exhausting all avenues to reduce costs.
SMC was formed in 2008 after Chinese state-owned metals group Sinosteel Corp acquired the assets of Australian iron ore miner Midwest Corp.
SMC and Atlas are among a handful of lower production miners in Australia locked in a fight for survival as iron ore prices sink.
