Owing to improved iron-ore prices, mining firm CuFe has recommenced operations at the John William Doutch Open Pit (JWD) iron-ore mine in Western Australia.
With a 60% stake, CuFe operates the joint venture (JWD JV) through its subsidiary Wiluna Fe Pty Ltd.
To support the restart, CuFe has begun hedge book building to cover future sales.
In a press statement, the company said: “To date, positions have been taken, basis March quotation period, with 10,000 tonnes swapped at USD120.7 and 20,000 DMT of collars entered with a floor price of USD110 DMT and ceiling price of USD129.5 DMT, basis 62% Fe. Lump premium is additional to this and remains floating at this stage.”
Furthermore, CuFe has negotiated a prepayment facility of $2m with Glencore, its JWD offtake partner, to fund the ramp-up activities at the mine.
Glencore will have the right of first refusal on offtake for CuFe-owned projects for the next three years.
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CuFe executive director Mark Hancock said: “It’s pleasing to see the iron ore price back at levels that allow mining to recommence at JWD.
“With the relaxing of Covid-related restrictions expected to drive economic activity in China and continued strong demand for our product from SE Asia, we are optimistic that 2023 will offer a period of attractive pricing for JWD iron ore.
“This, combined with an improved cost base arising from falling fuel prices lowering sea freight and road haulage cost and improved stripping ratios favourably impacting mining costs, means CuFe is well placed as we move into the next phase of JWD operations.”
The JWD Project forms part of the wider Wiluna West Iron Ore Project, which includes eight iron ore deposits over two Banded Iron Formation (BIF) ridges
CuFe plans to have product from the mine ready for haulage to port by the end of the month.