Cliffs mulls keeping Koolyanobbing iron ore mine

OREANDA-NEWS. US mining firm Cliffs has backed away from plans to sell its 11mn t/yr Koolyanobbing iron ore mine in Western Australia (WA) after six months of trying.

Cliffs has indicated that if it is still unable to find a buyer for Koolyanobbing it will exploit high grades at the mine, which made a margin of \$3.54/t during October-December, and look to close it within its existing five-year lifespan. Koolyanobbing is in WA's Yilgarn mining region, exporting 2.9mn t of iron ore through the port of Esperance in the October-December quarter at an average price of \$54.96/t fob.

Cliffs put Koolyanobbing up for sale in August last year after a takeover of its board of directors saw activist hedge fund Casablanca Capital appoint Loutenco Goncalves as chairman. Casablanca wanted Cliffs to sell its non-core overseas assets and focus on its more profitable domestic assets. But the continued slide in the iron ore price has made it difficult for Cliffs to attract the price it wants for Koolyanobbing, with it now making it clear that it will only sell at the right price.

Argus assessed iron ore prices yesterday at \$60.35/t for cfr China 62pc Fe fines compared with \$92.20/t six months ago.