Join the CuFe: Mega road trains en route to CuFe’s JWD iron ore project

CuFe is ramping up the productivity at its JWD iron ore ops with the WA government getting behind a critical transport upgrade.

WA Main Roads is going to turn the JWD mine access road and the Goldfields Highway into a payload busting major intersection, which will support the introduction of massive, 60m road trains which can deliver about 30% higher payloads – both slashing the cost of haulage and reducing the company’s haulage fleet.

CuFe (ASX:CUF) will fund the upgrade – not expected to be significant – and gets to roll out the mega road trains ahead of completion.

Executive director Mark Hancock is delighted.

“We appreciate Main Roads WA’s support with regards to this access agreement.

“The ability to utilise larger capacity road trains is a ‘win-win’ for the operation and the community, providing us with more confidence to reliably meet the haulage requirements of the mine in a more efficient and cost effective manner.”

The company has also installed and commissioned a new crushing and screening plant at the 60%-owned JWD project to improve reliability and processing capacity.

It has consistently demonstrated productivity in excess of the targeted production rate of 2,000 wet metric tonnes of lump product per day.

Strong iron ore sales

CuFe also continues to see strong demand for the high-grade, high-value lump iron ore product from JWD with offtake partner Glencore entering into a sales contract with a leading South East Asian steel mill for 360,000wmt over the period May to December 2022.

This equates to six shipments over the next eight months, with pricing index linked.

Not only does this secure the company’s order book through to the end of the year, but the current pricing of iron ore – circa US$150 per tonne – also ensures healthy returns especially since freight costs to South East Asia are lower compared to China.

The company currently has 295,000dmt of product subject to hedging.

Of this, 50,000dmt expires at the end of April, while with the remaining 245,000dmt covers the period May to December 2022.

This comprises of 120,000dmt swaps at an average price of US$154/dmt and 125,000dmt collars with an average floor price of US$127/dmt and ceiling price of US$167/dmt based on the 62% fines price, meaning that CuFe would likely enjoy a lump premium in addition to this.

This article was developed in collaboration with CuFe, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.