Mineral Resources’ Yilgarn closure ‘pushed’ by cost pressures but may free up infrastructure for minnows

Rising costs and logistical headaches ultimately pushed Chris Ellison’s Mineral Resources to call time on its Yilgarn hub, says iron ore boss Chris Soccio, who says “conversations need to be had” about the infrastructure left behind.

Despite winding down the operations, Mr Soccio on Thursday said MinRes would maintain a presence at the Port of Esperance — where it had long-dominated as the only customer until just last week — by continuing to export spodumene concentrate sourced from its Mt Marion and recently-acquired Bald Hill mines.

The miner revealed after-market on Wednesday that it would shut the Yilgarn hub after six years of mining lower-grade ore across a sprawling 200km operation, which it now deemed “not financially viable” beyond the next six months.

“Inflationary pressure has definitely pushed the operation that little bit harder than what we may have seen two years ago,” Mr Soccio said.

“There is still prospectivity . . . we really have just run out of time to find the resource and be able to bring them into production at the rate that we need.”

About 1000 people are employed across the operations, but the company said new roles would be made available to them. MinRes said it had about 800 vacancies to fill across its WA projects, including a new workforce at its now-operational Onslow mine.

Closing the Yilgarn mines could free up much-needed rail and port infrastructure for smaller mining players and other industries in the region, but Mr Soccio said no concrete discussions had been had with third parties.

“We haven’t really been in a position to have detailed conversations,” he said.,

“A lot of it will really depend on what other third-party demand there is for the system as well. So there’s still some conversations around all of this to be had now that we’ve made this announcement.”

Mr Soccio said MinRes would “need to make a decision” about what it would do with its locomotives and railway vehicles over the coming six months. The company also owns the majority of its road haulage assets.

MinRes got the all-clear to restart the Yilgarn iron ore hub in 2018 after securing an agreement with the then-McGowan government to pay no royalties on the iron ore it shipped from Koolyanobbing, which had been making losses under previous owner Cleveland-Cliffs.

Since the iron ore circuit at Esperance was built in the 1990s, only one miner at a time has been given the green light to use it.

Mr Soccio said being able to secure further royalty relief from the State Government wouldn’t have impacted its decision to close.