Reckoning arriving for miners. Can you see the completion of the...

Reckoning arriving for miners.

Can you see the completion of the first X-mas tree, to about $57, another -5% downside?
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Mineral Resources to shut iron ore mines employing 1000 workers
Brad ThompsonReporter
Jun 19, 2024 – 8.24pm


Mineral Resources is shutting down its high-cost iron ore mines in the Yilgarn region of Western Australia in a move that will affect about 1000 workers.

The company, led by its billionaire founder Chris Ellison, said it would look to redeploy as many of the workers as possible in its other iron ore and lithium mines in WA and in its mining service business.
The move to close the Yilgarn operations comes less than a month after MinRes started loading a maiden shipment from new iron ore operations in the Pilbara for China’s Baowu Group, the world’s largest steel maker.

In the past week, MinRes also sealed a deal to purchase iron ore assets in the Pilbara from Kerry Stokes-backed BCI Minerals for up to $72.6 million.

MinRes said on Wednesday that its Yilgarn hub was not financially viable beyond the end of calendar year 2024.


The company said the decision has been influenced by a combination of factors, including the limited remaining life of the five operating mines spread over 220 kilometres, and the significant capital cost and lead time required to develop new resources to ensure continuity of supply.
Mr Ellison said the “prudent, but difficult decision was not taken lightly”.

MinRes acquired Cleveland-based Cliffs’ loss-making Koolyanobbing mine near Southern Cross in the Yilgarn in March 2018 and kept it going with the help of a free kick on royalty payments from the WA’s Labor government.

The royalty relief ran out in February last year when MinRes hit 30 million tonnes of exports from the mine.

MinRes expects to ship about 4 million tonnes of iron ore from the Yilgarn over the next six months and then put them into care and maintenance from early 2025.

On top of the MinRes employees, the shutdown will hit workers at its contractors and suppliers.

The blow comes with thousands of jobs at the BHP nickel operations in WA hanging by a thread on top of major job losses at other nickel operations, including those owned by Andrew and Nicola Forrest.

MinRes said it had almost 800 job vacancies across the business and expected to hire more workers in the next few months through the ramp up of its $3 billion Onslow Iron project in the Pilbara.
The company said displaced Yilgarn workers would have priority for the vacancies and retraining.

MinRes said it would look to sell the mines but could also face a big rehabilitation bill. The company said it would disclose any financial impacts in its full-year results.

In its March quarter results, MinRes disclosed year-to-date free on board production costs of $107 a tonne at the Yilgarn operation. Its average realised iron ore price for the March quarter was $US98 ($146.90) a tonne, down 18 per cent on the previous quarter and representing 79 per cent of the benchmark price.

Mr Ellison said the Yilgarn exit came after 13 years of mining in the region and six years after his company stepped in with the help of the WA government to “save hundreds of WA jobs at Koolyanobbing that were set to be lost with the departure of Cliffs”.

The MinRes focus has shifted to ramping up the Onslow Iron project in partnership with Baowu, AMCI Group and POSCO that has opened up previously stranded reserves in the West Pilbara.
The project is slated to ramp up to nameplate capacity of 35 million tonnes a year by June 2025 and hit 50 million tonnes a year over time.

In comparison, the Yilgarn hub produced about 8 million tonnes a year.