Iron ore producer Mineral Resources (ASX:MIN) has decided to halt iron ore shipments from its Yilgarn Hub in Western Australia, resulting in 1,000 jobs being cut.
The hub, which incorporates the Koolyanobbing, Parker Range, and Carina mines, has been deemed not financially viable beyond the end of this calendar year. Operations are therefore due to stop by 31 December 2024.
MinRes, which has a market capitalisation of $12 billion, says the decision was influenced by several factors, including the limited remaining lives of its five operating mines, capital costs, and the time required to develop new resources.
The company plans to work with the employees affected by this decision on redeployment opportunities across its other operations. MinRes has two other iron ore hubs in the Pilbara and Ashburton regions.
The Pilbara Hub includes the Wonmunna and Iron Valley mines, as well as the Onslow Iron Project, which is one of the largest iron ore projects currently under development in Australia. Onslow is forecast to ship around 35 million tonnes of iron ore per year, with an expected 30-year mine life.
Managing Director Chris Ellison says the company has almost 800 vacancies across its business, including the low-cost, long-life Onslow Project.
“This prudent but difficult decision was not taken lightly and follows years of investment to extend the life of our operations in the Yilgarn,” he says.
In MinRes’ annual report for 2023, operating cash flow of $1.4 billion was up $1.1 billion on the previous year. Its total revenue was a 40% increase from the previous year, totalling $4.8 billion, while return on invested capital of 6.7% was impacted by impairments on its iron ore assets and continued investment in its projects.
The company says operations at Yilgarn will slow down in a staged approach over the next six months. Up to 4 million metric tonnes are anticipated to be shipped by the end of this year.
From there, the Yilgarn Hub will transition into care and maintenance.
MinRes adds five digger fleets, including 28 trucks and 25 pieces of ancillary gear will be redeployed across its assets.
The company will consider future options for the Yilgarn Hub, including rehabilitation or disposal. During 2025, exploration drilling and environmental studies focused on hematite and magnetite targets will continue.
Write to Aaliyah Rogan at Mining.com.au
Images: Mineral Resources
