Price falls contribute to BC Iron loss

Miner BC Iron has been hit by lower ore prices, but will operate at a profit after lowering costs. Source: AAP

FALLING iron ore prices and production issues have sent Pilbara ore miner BC Iron to a $97 million half year loss.

THE company slumped from a profit of $70 million in the same period a year earlier, as a fall in shipments and prices more than halved its revenue in the six months to December.

Excluding $100 million in writedowns on the value of its assets, which was a result of lower iron ore prices, BC Iron still made an underlying loss of $18 million.An issue with high clay levels at its Nullagine joint venture (NJV) with Fortescue Metals during the September quarter has now been overcome, but it hampered half year production.BC Iron's average realised price for iron ore also fell 39 per cent from a year ago.The company has already been cutting costs, including dozens of job losses in December, and expects its total costs per tonne of iron ore to be between $A54 and $A61 in the second half of the financial year.That means the company remains profitable, as its average realised price in the half year was $US82 per tonne, although iron ore prices have declined slightly since the end of December."BC Iron remains focused on operating the NJV in an efficient and productive manner, while continuing to build on the sustainable ... cash cost savings of $2 to $3 per wet metric tonne that we have delivered to date," managing director Morgan Ball said.BC Iron shares closed 3.5 cents lower, down 6.6 per cent, at 49.5 cents.BC IRON PLUNGES INTO THE RED* Net loss of $97.3 million, down from profit of $69.9m* Revenue of $133m, down 56 pct from $301m* No interim dividend, down from 17 cents per share

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