Australia-based iron ore miner Mount Gibson Iron Limited (Mount Gibson) has announced that it has formally terminated an offtake agreement entered into with Chinese steelmaker Xinyu Iron and Steel Group Limited on November 25, 2016, relating to production from the company’s Iron Hill iron ore mine in Western Australia, following Xinyu’s failure to comply with a fundamental term under the offtake agreement.
Mount Gibson stated that, consistent with its rights, it is now free to place all production previously committed to Xinyu under this agreement with alternative customers. Mount Gibson has reserved its rights to pursue Xinyu for any resulting losses. The company has already successfully sold Iron Hill material into the spot market, and fully expects to continue to place all production from Iron Hill with customers as it becomes available.
As previously announced, Xinyu committed to purchase approximately one quarter of the first year’s planned production from Iron Hill under its offtake agreement with Mount Gibson.