Gina Rinehart's Roy Hill mine to miss deadline for first shipment
Australia’s Roy Hill iron ore mine, majority owned by Gina Rinehart’s Hancock Prospecting, won’t deliver its maiden shipment before the end of the month as originally expected.
But according to the operation’s chief executive, Barry Fitzgerald, October 21 was never a set deadline. He told The West Australian he actually believed Roy Hill would be ready to export its first ore sometime next month.
“For projects of this scale and complexity it is not unusual for minor slippages such as this. Our equity partners and lenders are fully aware of this schedule and are supportive,” Fitzgerald was quoted as saying.
The transition from the construction to the production phase comes at a challenging time for the company. Iron ore prices have fallen sharply since mine construction began in 2011, tumbling 70% over the past four years.
Some have argued that the addition of ore mined from Roy Hill would drag prices down even further.
However, Hancock Prospecting executive director, Tad Watroba, said in a statement Thursday that that sort of speculation was plainly incorrect.
“Some media have got it wrong and are overstating the impact on the iron ore price from the Roy Hill Project. They ignore that the prices dropped last year, pre Roy Hill even shipping,” Watroba said.
He added that analysts and media have not taken into account that the mine’s shipments will only represent a small portion of its capacity of 55Mtpa.
“They have also ignored the significant increases from now to end 2017 from other companies which will significantly exceed shipments from Roy Hill,” Watroba said.
According to Metal Bulletin’s iron ore index, the spot price for benchmark 62% iron ore fines currently sits at $53.74 a tonne, about 25% below the price it traded at the beginning of 2015.