Bulk: BCI is making good money from its iron ore, but still wants out

Strong prices are seeing even the lower quality iron ore producers make decent cash, with BCI Minerals (ASX:BCI) banking $2.8m in the March quarter.

But it’s not enough for BCI to want to keep the iron ore projects in its portfolio.

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BCI said it is still continuing with its process to divest its iron ore assets so it can secure additional cash to sink into the Mardie salt and potash project.

The company shipped 1.8 million wet tonnes from its Iron Valley mine, which is operated by larger producer Mineral Resources (ASX:MIN).

BCI said about 65 per cent of the Iron Valley product shipped during the quarter was fines, because Mineral Resources wanted to take advantage of higher headline iron ore prices and lower discounts for 58 per cent iron ore products to draw down on existing fines stockpiles.

Last week, the price for 58 per cent fines hit a five-year high of nearly $US80 ($111.58) a tonne, while the higher quality benchmark 62 per cent fines price continued its run back up above $US95 a tonne.

Fines, which attract significantly lower pricing than lump, has accounted for about 45 per cent of the Iron Valley product shipped to date.

BCI said its EBITDA – or earnings before interest, taxes, depreciation and amortisation – was a healthy $2.8m, including a positive prior quarter adjustment of $600,000, thanks to strong iron ore prices.

The company has been contacted for comment.

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