Fenix braces for dual hit from fuel constraints and cyclone risk
Australian iron-ore producer Fenix Resources on Thursday warned that diesel shortages linked to geopolitical tensions, combined with the approach of Tropical Cyclone Narelle, were impacting mining and logistics operations in Western Australia.
The company said it was preparing for potential disruption as the cyclone intensified off the state’s north-west coast, with forecasts indicating it could affect the Gascoyne Coast before tracking south through the Mid-West as a damaging weather system.
In response, the Mid-West Port Authority has activated cyclone procedures, resulting in the temporary closure of the Port of Geraldton and halting shipping activities.
Fenix said it was implementing safety measures across its operations, prioritising the wellbeing of employees and contractors.
The company also noted that diesel fuel supply constraints, driven by the ongoing conflict in the Middle East, were beginning to affect operations across the mining sector.
Fenix expects disruptions to fuel deliveries from its contracted suppliers and has started scaling back non-essential mining and haulage activities. However, it said existing stockpiles should allow it to continue processing and transporting iron-ore to Geraldton in the near term.
The port closure is expected to delay shipments and impact iron-ore sales for the March quarter, with cargoes likely to be rescheduled once operations resume.
Despite the short-term disruptions, Fenix maintained its full-year guidance, forecasting iron-ore sales of 4.2-million to 4.8-million tonnes at a C1 cash cost of A$70/t to A$80/t, free-on-board Geraldton.
The company said its outlook assumes port operations restart in early April and fuel supply conditions normalise.
Fenix added that, based on current information, there was no need to revise its three-year production plan or withdraw guidance, but it would continue to monitor developments and update the market as required.
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