BC Iron will follow Atlas in closing iron ore mines if necessary

Iron ore. Image: Atlas Iron.

BC Iron will follow Atlas and suspend operations if that proves to be in the best interest of shareholders.

“We won’t shy away from that decision if it’s in the best interest of our shareholders,” BC Iron managing director Morgan Ball told The Australian Financial Review.

“As a board, we are very cognisant of the macro economic environment and we are watching it very closely and we will make decisions in the best interests of our shareholders.”

Analysts have identified BC Iron as a miner which should look hard at mothballing its operations because prices for iron ore are below the cost of production.

The miner’s cash costs during the March quarter were $49 per tonne. International prices have been running at $US47 a tonne before recovering the last few days to just above $US50. It’s believed BC Iron needs $US56 a tonne to break even.

“As a short-life, high cost producer, we believe BC Iron should shut down production to conserve cash,” Citi said.

Atlas Iron is putting its three mines on care and maintenance. The fallout from this has spread to mining services companies which has lost business from the closure.

BC Iron shares are down 3.45% to $0.28 against a rally among the miners.

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