Mount Gibson Iron Ltd. entered into a second iron ore off-take agreement with Shougang Group Co. Ltd. subsidiary SCIT Trading Ltd. regarding its Iron Hill mine in Western Australia, after terminating two of three previously entered off-take deals.
Under the company's second deal with the Shougang Group subsidiary, SCIT Trading will purchase approximately 82% of available lump and 83% of fines ore up until July 8, 2018, when the existing off-take is expected to end, according to a Dec. 21 release.
If SCIT Trading does not extend the existing contract, the rate of supply under the second off-take will adjust to 75% of available lump and fines ore. Under the existing off-take announced in late 2016, SCIT Trading purchases approximately one-quarter of the annual production from Iron Hill.
Pricing of the new off-take will be based on S&P Global Platts pricing indexes and market-typical lump premium and impurity penalties on a cost and freight basis for delivery in China. The new agreement requires shareholder approval, to be sought in the March 2018 quarter.
Mount Gibson will continue selling the remaining uncommitted portion of production from Iron Hill directly to spot customers.
S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.