Two mines to continue operations in initial boon for McAleese, Qube
After weeks of mining sector woe, a little good news has emerged for transport and logistics firms McAleese and Qube.
Mining company Atlas Iron has announced two of its mines, Abydos and Wodinga, will recommence next month, after previously saying all would be put into care and maintenance until the iron ore price rose.
McAleese’s bulk haulage division and the company as a whole has a strong exposure to Atlas, with contracts for Atlas’ Abydos, Mt Webber, Mt Dove and Pardoo mines in the Pilbara but Atlas only mentions the first two.
Abydos processing and haulage were “largely uninterrupted”.
There is some hope that the Mt Webber mine might be brought back into operation in the longer term.
Qube operates the Utah Point export facility at Port Hedland, which handles Atlas ore.
Neither contractor responded to the announcement at editorial deadline today but it seems to indicate they will receive less for their services than previously.
Along with sales details, the miner says cost reductions “were achieved with the support of Atlas’ key service providers”.
It expects to be cash-flow positive next month through reduced “all in cash costs”, which include freight.
“Atlas will continue to work on defining contractual arrangements with key contractors in an effort to convert these initiatives into viable longer-term operating solutions as soon as possible,” it states.
Despite that, intensive negotiations between contractors, including mining and civil construction firm MACA, and the miner and its creditors, aimed at this sort of development, have borne some fruit.
The miner insists it remains solvent and “in compliance with its debt instruments” but will continue with its share-trading suspension.