Australia-based mining and materials company Arrium Limited has announced that it has decided to mothball its higher cost Southern Iron mining operations to provide a sustainable, cash flow positive business in a low iron ore price environment. The miner aims to maximize cash generation by optimizing its lower cost Middleback Ranges operation to deliver approximately 9 million mt per year of iron ore for sale.
The mothballing decision results from the substantial fall in iron ore prices over the last half, as well as increased uncertainty around the timing and extent of any price recovery. Iron ore prices are currently at five-year lows, and are down approximately 45 percent on prices for the prior financial year.
Arrium Mining also announced that it produced a record 4.22 million wet mt of iron ore in the quarter ending December 31, up 26 percent compared to the previous quarter. The company's iron ore shipments in the given quarter amounted to 3.29 million mt, decreasing by five percent quarter on quarter.