CuFe Ltd (ASX:CUF) has inked a 12-month contract for port services at Gerladton Port with Fenix Port Services P/L, a subsidiary of Fenix Resources Ltd, which covers the inload and outload of CuFe’s product, provision of storage and allocation of reserved capacity over the berth.
The contract - which has an effective start date of October 1, 2023 - has a reserved capacity allocation of 1.4 million tonnes, with 80% of this capacity subject to 'Take or Pay' on certain charges and a built-in option to suspend or terminate on notice should operations at the JWD Iron Ore Mine be suspended.
The agreement also offers CUF the option to process certain third-party tonnes through the shed in addition to its own to maximise the use of the facility and reduce unit costs.
Well timed agreement
“We are pleased to sign up as Fenix’s first third-party customer following their purchase of Mt Gibson’s Geraldton Port infrastructure and are looking forward to working with them and MWPA for the ongoing efficient export of our JWD product," CuFe executive director Mark Hancock said.
"The agreements will facilitate the continued export of our high-grade iron ore at a time when iron ore prices are performing strongly.
"The ability of CuFe to agglomerate certain third-party tonnes with its own under the contract allows us to increase utilisation of the shed, thus reducing our fixed costs and allowing shipments to build more quickly, improving our working capital cycle.”
CuFe has also entered an updated Port Services and Access Agreement with the Mid West Ports Authority (MWPA) to cover vessel berthing and related operations.