Sphere Minerals, controlled by Glencore, slowed plans to develop a $900m iron-ore mine in Africa after prices of the steel-making material plunged.
The board is reviewing the Askaf project in Mauritania, Sphere said yesterday in a statement, after approving development in April.
Askaf North had been expected to begin output in early 2017 and is forecast to yield about 7.5-million tonnes a year once developed.
"Taking into account the time involved in this review it is currently expected that the start of production will be delayed," Sphere’s company secretary Matthew Conroy said on Monday in a statement. Sphere is 88% owned by Glencore’s Sidero, according to data compiled by Bloomberg.
Iron ore has declined 40% this year as the largest producers, including Vale and Rio Tinto, increase low-cost output from Australia and Brazil, adding to a global glut.
Global seaborne output will exceed demand by 26-million tonnes this year and by 41-million tonnes next year, UBS says.
The Mauritanian government reached a preliminary agreement with Glencore to share a port and railway to serve the Askaf project, according to an April filing. Baar, Switzerland-based Glencore, which has two other undeveloped iron-ore projects in West Africa, holds 79% of Askaf, it said in its annual report.
Source: Bloomberg
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