Posted in | Iron Ore | Mining Business

Mount Gibson Iron Makes Ore Deal With Glencore

Mount Gibson Iron has agreed to sell iron ore to Glencore International. The Australian mining company signed a deal with the Swiss trading giant to sell 48% of the mine production of iron ore from its Extension Hill mine in Western Australia. This would roughly equal to 1.44 million mt/year from the mine located 239 km away by rail from the port of Geraldton.

The Perth based mining company will sell the iron ore to Glencore International based on price indexes published by Platts. They will not pay a marketing fee to Glencore as per the agreement. The trading company will also benefit from the deal in terms of possible freight and pricing arbitrage as per USB Resources Research.

The Australian mining company currently mines close to 6.3 million tons of high grade hematite iron from its mines at Koolan Island and Tallering Peak in the state of Western Australia. Luke Tonkin the Managing Director of Mount Gibson Iron said that they were happy with the deal that they had signed with Glencore International and they anticipated concluding further agreements in respect of remaining unallocated tonnages shortly.

There had been another deal in the pipeline to sell 80% of the Extension Hill production to Shougang Concord International Enterprises Co. This fell through because despite discussions the parties involved could not come to terms over price issues in the month of April.

Mount Gibson had suffered financially when several ore shipments to Asian traders had to be cancelled in the financial crisis that hit in 2008. However it has been recovering well with the renewed demand and higher iron ore prices.

Joel Scanlon

Written by

Joel Scanlon

Joel, originally from the UK, emigrated to Australia in 1995 and spent 5 years working in the mining industry as an exploration Geo-technician where he developed skills in GIS Mapping and CAD. Joel also spent a year working underground in a gold/copper mine. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm before starting a successful business providing graphic and web design services to local businesses on the eastern seaboard of Australia. Joel is skilled in project management, web programming, design, animation, database and networking, software and editing. Joel has been with AZoNetwork since its inception in 2000.

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