'External market volatility beyond the company’s control' - iron ore miner halts shipments
After completing its inaugural shipment, Venture Minerals (ASX:VMS) said it is temporarily halting iron ore shipments from its Riley Iron Ore Mine in Tasmania after the metal's recent precipitous fall.
The company announced its decision today.
Venture explained that 62% Fe iron ore prices have "declined significantly from highs of over US$230 per tonne to the current price of US$106 per tonne."
"This decline has coincided with an increase in the discount rate for Riley’s 57% Fe grade ore, from a market rate of 10% used in the Company’s 2019 Feasibility Study, to the current market rate of 30%," said Venture Minerals in a news release. "The company, together with the broader market, also continues to experience a volatile shipping market, largely due to congestion in Chinese Ports, together with COVID-19 and political impacts, all of which have culminated in shipping rates tripling from US$18 per tonne since the Feasibility Study to around US$54 per tonne."
"In responding to the market conditions outlined above, Venture is completing a full review of operations at the Riley Iron Ore Mine, to identify cost efficiency measures to offset some of the external market volatility beyond the Company’s control.
Last month Venture Minerals (ASX:VMS) announced that its dry screening operations commenced at the Riley Iron Ore Mine in Tasmania.