Citic has been forced to writedown the value of its Sino Iron project in the Pilbara by $1.8 billion due the falling price of iron ore.<\/p>\n
The Chinese company said it expected its February financial results to include an after-tax asset impairment of between $US1.4 billion to $US1.8 billion.<\/p>\n
It said the decision was made after considering the current and predicted price of iron ore.<\/p>\n
“A key component for consideration is the current and forecasted price of iron ore,” Citic said.<\/p>\n
Citic only has two production lines out of six up and running at the $10 billion mine.<\/p>\n
The company said two more units would start work later this year, with the rest set for commissioning in 2016.<\/p>\n
The mine has been in production for just over a year, and has exported 2.4 million tonnes of iron ore.<\/p>\n
It is the first time a Chinese-owned mining company has shipped iron ore products from WA to China.<\/p>\n
The project ran into a spate of delays and cost blow-outs during the commissioning phase.<\/p>\n
Legal disputes with billionaire Clive Palmer over royalty payments have also hampered the development and driven up costs.<\/p>\n
The value of iron ore has nearly halved since this time last year, and analysts predict there is more pain to come as the three majors – BHP Billiton, Rio Tinto, and Vale- ramp up production that will push more supply into the market.<\/p>\n
Last week Macquarie Group joined the list of major banks that have their iron ore price forecasts.<\/p>\n
The bank said it expects iron ore prices to average $US68 a tonne in 2015 and $US65 a tonne in 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"