Australia-based miner Northern Iron has provided an update regarding developments affecting the company and its Norwegian subsidiary Sydvaranger Gruve (SVG). The company said that, due to the continued low market price environment for iron ore, its working capital position has been negatively affected through the March quarter. Supportive measures have been agreed in respect of SVG's short-term financing arrangements, subject to completion and execution of final documentation.
SVG has also reached an agreement with its largest customers to amend its off-take contract for the supply of iron ore concentrate. Under the terms of amended agreement, payments for sales will be closely aligned to the timing of each shipment for the period between April 1 and June 30, 2015.
Northern Iron said that, if these measures prove unsuccessful, it is unlikely that Sydvaranger mine will continue to be profitable.