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Share Name | Share Symbol | Market | Type |
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Sphere Min Fpo (delisted) | ASX:SPH | Australian Stock Exchange | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
By Ross Kelly
SYDNEY--Glencore PLC's (GLEN.LN) Australian-listed iron-ore unit said it would book a US$240.7 million writedown and shelve development of a West African mine because of plunging prices for the steelmaking ingredient.
Sphere Minerals Ltd. (SPH.AU), which is 88%-owned by Glencore, said it could not develop the Askaf project in Mauritania profitably at current low iron-ore prices even after intensifying efforts to reduce operating costs.
"All construction commitments are being closed out, expenditure minimized, and employment numbers reduced," Sphere said in a statement.
Glencore has effectively controlled the Askaf project since its multibillion-dollar takeover of Xstrata PLC in 2013. Three years earlier, Xstrata had fended off competition from Chinese steelmakers to acquire a majority stake in Sphere, but wasn't able to secure enough shares to delist the company from the Australian Securities Exchange.
Spot iron-prices have roughly halved in the past year to US$58 a metric ton, as big producers with lower operating costs such as BHP Billiton Ltd. (BHP) and Rio Tinto PLC (RIO) ramp up supply from Australia and China's economic growth cools.
Sphere said the impairment charge includes a US$192.5 million writedown of exploration and evaluation spending that has already occurred on Askaf. The rest of the charge comprises writedowns associated with the nearby El Aouj and Lebtheinia prospects.
Write to Ross Kelly at ross.kelly@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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