Fortescue Metals Group Ltd. has agreed to acquire BC Iron Ltd.'s 75% interest in the Nullagine iron ore joint venture for A$1.00, and will now evaluate the feasibility of restarting operations in the current market.
The acquisition includes all assets and rehabilitation obligations of the Western Australian joint venture, which has been suspended since December 2015 due to low iron ore prices. Fortescue previously held a 25% interest in the joint venture.
"We will review operations over the coming months to determine the best path forward, taking into account all relevant factors including market demand and other potential opportunities to extract value from the assets," Fortescue CEO Nev Power said in the Oct. 10 release.
Fortescue will pay a royalty to BC Iron from future iron ore sales, capped at A$7.5 million, which will be partially withheld to offset obligations assumed by the company.
In early September, BC Iron's new CEO Alwyn Vorster said the company is mulling a sale of the Nullagine mine and is committed to its other iron ore assets in Western Australia, Iron Valley and Buckland.