Commodities, Finance, Iron ore, News

Iron ore on the mend as price reaches three-month high

Rio Tinto

Iron ore is enjoying a positive start to 2022 as seaborne prices surpassed $US130 ($178.5) per dry metric tonne (dmt) for the first time in three months this week. 

According to Mysteel, 62 per cent Australian iron ore fines were trading at $131.5 per dmt at the port of Qingdao on Wednesday, buoyed by improved demand.  

This comes after iron ore prices dropped below $US90 per dmt in the second week of November, which marked 18-month lows for the commodity at the time. 

The improved market sentiment has led to various iron ore projects restarting operations, including CuFe at its JWD joint venture project in the Goldfields region of Western Australia and GWR Group at its C4 iron ore mine in WA. 

CuFe (previously known as Fe) had halted operations in the December quarter as it reallocated resources to the processing and haulage of stockpiled iron ore. 

With the price uptick, mining activities have recommenced including crushing and screening and the haulage of newly mined material. 

Having navigated the December quarter strategically, CuFe executive chairman Tony Sage is buoyed by the position of his company going forward. 

“It’s encouraging to see the rebound in iron ore price, assisted by a reduction in sea freight rates,” he said.  

“We’ve focussed on cost and cashflow management over the last quarter while prices have been weaker and start this quarter in a solid position with the mine fully operational and poised to benefit from the stronger prices in coming months.” 

GWR Group had suspended operations at C4 in September due to the volatility in iron ore prices, but the company is well placed to increase volumes in future months amid the improving sentiment. 

GWR had sustained some on-site operations over the last few months to capitalise on stockpiled iron ore, including crushing from the run-of-mine (ROM) pad and haulage. 

As a result, GWR completed two shipments in the December quarter totalling 115,009 wet metric tonnes of iron ore. 

GWR chairman Gary Lyons said his company had made the necessary strategic decisions in response to the market at the time and was well placed to recommence mining. 

“The GWR team has taken a proactive approach in order to extract value from its flagship C4 iron ore mine and has continued to export iron ore from existing stockpiles whilst mining was suspended,” he said. 

“We have worked through many challenges over the past few months and I am proud of what we have achieved in difficult circumstances. The company has recommenced mining operations in January and will keep shareholders informed of progress.” 

At the time of writing, the seaborne price for 62 per cent Australian iron ore fines had weakened slightly to $US127.25 per dmt at Qingdao. 

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