Mount Gibson Iron has suspended all non-essential activities at the Koolan Island mine in the Kimberley, Western Australia (WA), following the collapse of the Main Pit seawall last week, which could affect 200 jobs.
The company said a comprehensive evaluation of the situation is underway, which remains at a preliminary stage and is aimed at reducing expenditure and preserving capital.
Mount Gibson has placed the Koolan Island operation on care and maintenance until such time as the detailed identification and assessment of potential options is completed.
The assessment will include the likely timing and cost of a range of options to rebuild the Main Pit seawall and resume production.
The company will decide whether to recommence production from the Koolan Island mine only if it believes it is possible to do so.
An update on the preferred course of action is anticipated in the first half of 2015.
As a result of these events, the company plans to slash jobs at the Koolan Island and expects redundancy costs to be in the order of $11m.
The company continues to monitor and assess the situation in partnership with relevant regulatory agencies, including the WA Department of Mines and Petroleum (DMP), with regard to the current status of activity on Koolan Island.
The company will also be reviewing the carrying value of its assets at 31 December 2014, including Koolan Island, as part of its normal period-end reporting obligations.
Image: Mount Gibson Iron suspends activities at the Koolan Island mine. Photo: courtesy of Mount Gibson Iron, Western Australia.