SANTIAGO, April 15 (Reuters) - Chilean iron and steel company CAP may shutter one of its mines as it seeks to reduce costs following the recent collapse in the price of iron ore, the company’s chief executive said on Wednesday.
CAP, which has had 80 percent of its value wiped out since the start of 2014, had already managed to halve extraction costs over the last year to around $40 a tonne, said CEO Fernando Reitich at the company’s annual general meeting.
A global glut stoked by low-cost miners from Australia and Brazil at a time of softening Chinese steel demand has pushed iron ore prices to the lowest level in a decade, leading some mining companies to halt production.
Analysts at Citi this week forecast prices continuing to slide to around $40 a tonne by 2016.
Against this backdrop, Reitich said CAP was considering whether to temporarily stop operations at its El Romeral mine, its highest-cost project, located about 500 kilometers (311 miles) north of Santiago.
“It’s a choice we’re evaluating, it is a relatively simple way of lowering costs, but not necessarily optimal,” he said.
El Romeral produces 1.7 million tonnes of pellet feed per year, as well as 300,000 tonnes of fine ore and 400,000 tonnes of pellets, according to its website.
Reporting by Felipe Iturrieta, Writing by Rosalba O'Brien; editing by Matthew Lewis