Fuel shortages begin whacking WA iron ore as Fenix Resources plans to use stockpiles instead of mining

Mid West iron ore miner Fenix Resources has warned that a lack of fuel supply is “beginning to impact operations” and the pain is being exacerbated by cyclone Narelle. It’s the first admission from a miner in WA’s vital iron ore system that fuel is running dry as bombing in the Middle East triggers an oil and gas shock. Shipping from Geraldton Port has been suspended as tropical cyclone Narelle bears down on WA’s coast and Fenix plans to dip into its ore stockpiles instead of mining to conserve diesel once the cyclonic weather passes. “The company is expecting disruptions to supply resulting from both the impact of cyclone Narelle and due to a lack of fuel supply availability from Fenix’s contracted diesel suppliers,” Fenix stated. “In response, Fenix is taking steps to scale back non-essential activity at the company’s mining and haulage operations. “Subject to the potential impacts from cyclone Narelle, Fenix expects to maintain sufficient fuel supplies to continue to process and haul iron ore to Geraldton Port given healthy stockpiles available at the company’s mines.” Fenix on Tuesday announced for the next financial year it had hedged 18 million litres of diesel — equating to about 30 per cent of its expected diesel fuel — at prices between $US0.69/L and $US0.79/L. The John Welborn-led company is now focused on getting through the current financial year and believes it can still achieve guidance. “Notwithstanding these impacts, Fenix considers that its FY2026 guidance of total iron ore sales of 4.2 million tonnes to 4.8mt at a C1 cash cost of between $70 a wet metric tonne and $80/wmt free on board at Geraldton Port remains appropriate.” This is based on the expectation that Geraldton Port reopens in “early April” and diesel fuel supply is “maintained at normal levels”. Industry insiders said the State’s iron ore giants — BHP, Fortescue and Rio Tinto — have built up large diesel stores which could keep their mining operations running for a few months if fuel imports grind to a halt. Their bigger weakness is getting workers to site given the vast majority of Pilbara iron ore workers are fly-in, fly-out. Airlines across the globe are beginning to cut flights amid the fuel crunch. Some flights across regional WA have also been cancelled due to cyclone Narelle. The cyclone appears to have missed the key iron ore port of Port Hedland but is rapidly intensifying off the North West coast. It is expected to hit land near Exmouth on Friday and then track southward through the Mid West.