BC Iron has awarded a road haulage contract for its Nullagine mine to Qube.
Qube will commence hauling product on the Nullagine private haul road from December 1, following the expiry of the existing contract.
Nullagine is a 75/25 joint venture between BC Iron and Fortescue Metals Group. It is approximately 150km north of Newman in WA’s Pilbara region, and has the capacity to export up to 6mtpa of iron ore. BC Iron acts as mining operator and manager, while Fortescue provides for the marketing and export of iron ore through its infrastructure in the region.
The Qube deal is expected to deliver a 30-35% decrease in Nullagine’s total road haulage costs, inclusive of fuel overheads.
“The [Nullagine joint venture]’s C1 cash cost guidance for FY16 of $42-45/wmt assumed a certain level of savings would be achieved from the award of this contract, which will be slightly exceeded,” BC Iron said in October.
“BC Iron is currently considering the new contract rates, which will apply from 1 December 2015 onwards, as part of its ongoing cost management focus and will advise the market if there is any change in guidance.”
BC said it looked forward to “a productive working relationship” with Qube.
The contract has a two-year term, but there is a one-year option for BC Iron to extend it.