Higher iron-ore price increases chances to reopen Kirkenes mine

“Naturally, higher ore prices increases the likelihood of reopening, but there is much to be done before restarting, so the price much stay high a while for that to happen,” says Felix Tschudi to the Barents Observer.

Tschudi is owner of the Tschudi Group, one of the shareholders in Sydvaranger Gruve AS that went bankrupt last November.

It is Financial Times that reports about the rally in iron ore prices the first three months of 2016.

The 25 percent increase reflects strengthening Chinese steel process and increased production ahead of the country’s key construction season, the newspaper reports.

But still, iron-ore prices could develop like a roller coaster being $37 in December and over $55 last week. At the time of the bankruptcy filing for Sydvaranger Gruve, iron-ore prices was below $40.

Sydvaranger Gruve was forced to close the doors just days before the current price rally started. 400 miners in Kirkenes lost their jobs and the large machinery park from the open-pit mine in Bjørnevatn is currently being transported down to the harbour area in Kirkenes for possible sale.

Retrospectively, Felix Tschudi says, one can of course say the creditors should have been more patient, but the low prices had been low for a while and we can’t take it for granted that the current jump will last.

“Creditors showed great patience and losses are easily becoming very high if they had waited too long, so it is not easy to say that someone should have had more patience,” Felix Tshudi says.

“That is something you first know in retrospect.”

Creditors are negotiating a sale Sydvaranger Gruve, but don’t want to tell details.