Well it seems MIN aren't too concerned about the discounts applied to low grade iron ore especially mines located nowhere near port and nowhere near the concentration of their operations near Port Headland. See today's article below
It sounds like the full impairment charged for Horizon 1 and Horizon 2 assets for AGO could be written back in full for MIN given their close proximity to Port Headland should they be successful in a takeover.
It looks like I was too conservative when I said that AGO would be contributing about 40% of the total consolidated equity in the event of a takeover.
Just remember we lucky shareholders have been awarded 8.2% of the consolidated entity.
https://thewest.com.au/business/min...nobbing-as-cliffs-beats-retreat-ng-b88832619z
The State Government is trying to keep the Koolyanobbing iron ore mine near Southern Cross open by brokering a deal to sell the operation, which is scheduled to close next month.
The Government revealed in yesterday’s State Budget that it was “attempting to facilitate a possible agreement with interested parties in purchasing” the 11 million tonne-a-year project, owned by US-based Cliffs Natural Resources.
WestBusiness understands the Government is confident of securing a buyer for the mine, but is unsure on the timing of any deal.
Cliffs announced in March it would make its last shipment of iron ore from Koolyanobbing at the end of next month, citing big discounts for its low-grade ore which had made the mine unviable.
The Koolyanobbing operation is understood to support more than 200 jobs, including workers at the mine site, rail line and port operations at Esperance, from where the ore is exported.
Mineral Resources is rumoured to be a potential buyer of Koolyanobbing, given MinRes’ nearby Carina mine is scheduled to close at the end of the year.
The company had hoped to continue mining in the Yilgarn region by developing its Bungalbin East and Jackson Five deposits but the State Government formally rejected its plans late last year, citing environmental concerns associated with the Helena Aurora Range.
Cliffs and MinRes declined to comment yesterday.
Yilgarn Iron Producers Association chief executive David Utting said securing a “shovel-to-ship” iron ore operation was a once-in-a-lifetime opportunity and he believed several players would be running the ruler over the Koolyanobbing mine and associated infrastructure at Esperance.
Although mining hematite ore in the Yilgarn is about to cease, Mr Utting said the fundamentals of developing magnetite projects were becoming more attractive given the strong premiums being paid for product with high iron grades and cheaper energy options emerging.
The Yilgarn is rich in magnetite, which offers higher iron grades but requires more energy-dependent processing.
Yesterday’s State Budget assumes the price of iron ore will fall to an average of $US61.90 next financial year and fall again to $US60.80 the year after.
