Monday 20 April 2015
Special Edition 132
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China's Cu-River Mining buys Termite Resources iron ore mine
A group of Chinese businessmen have bought the failed Cairn Hill iron ore mine from the
liquidator of Termite Resources, one of the first companies to go bust last year at the start of
the iron price tumble, which has worsened considerably in the past few months.
Termite Resources was one of the first companies to go bust in the iron ore price collapse.
Cu-River Mining has acquired the mine near Coober Pedy in northern South Australia for an undisclosed
price, adding to some nearby exploration tenements they bought for $3.7 million in September 2014 from
the liquidator, Ferrier Hodgson. Those tenements are known as the Mt Woods iron ore project.
Cu-River Mining is an entity set up in Australia in June 2014 and its president is listed as Yonggang Shan.
Termite's assets have been liquidated by Ferrier Hodgson, which was appointed as administrator of
the company in June 2014, when the iron ore price was $US89 ($116.82) a tonne. It has almost halved since
to $US47 a tonne. Termite operated the mine for less than four years before it collapsed, throwing
200 people out of work as iron ore prices began to tumble.
Termite was 51 per cent-owned by ASX-listed IMX Resources, with the other 49 per cent owned by China's
Taifeng Yuanchang International Development.
IMX had a market capitalisation of $200 million in December 2010 as the first shipments of iron ore were
made from Cairn Hill, about 55km from the opal mining centre of Coober Pedy.
Ferrier Hodgson partner Martin Lewis said Cu-River had continued to invest in Australian iron ore assets and
it was a positive outcome, given the conditions facing iron ore miners.
Ferrier Hodgson wouldn't comment on the price tag of the iron ore mine.
The transaction has been approved by the South Australian government, the federal Treasurer and
the Department of Defence.
The Mt Woods tenements comprise eight exploration licences covering about 3400 square kilometres, about
50 kilometres south of Coober Pedy. The acquisition by Cu-River of those tenements in September 2014 for
$3.7 million enabled IMX to pay $3 million to extinguish a liability to Flinders Ports, which operates
most of South Australia's ports. Termite was exporting iron ore through ports operated by Flinders Ports during
the good times for the company.
Cairn Hill was a high-cost mine but it was able to prosper initially at a time of much higher iron ore prices.
The iron ore price averaged about $US135 a tonne during 2013.
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