Update: McAleese group looks grim as mining operations drop
UPDATE: McAleese Limited released a statement today refering to the request for voluntary suspension."The voluntary suspension was sought while the Company considered and reviewed the operational and financial implications, and commercial scenarios that could result from Atlas Iron Limited's (ASX: AGO) (Atlas) announcement dated 10 April 2015 that it intended to progressively place its Pilbara mines into care and maintenance," it stated. "McAleese Group's Bulk Haulage division is contracted to provide haulage and ancillary services to these mines. "McAleese Group has held constructive discussions with Atlas and its stakeholders on a range of commercial scenarios with a view to supporting ongoing mining and haulage activities from Atlas' mines. "As these discussions remain ongoing, the Company advises that its voluntary suspension is expected to remain in place for an additional period of up to five business days while this matter is progressed and the Company assesses the operational and financial implications of any agreed outcomes. "The company will ensure that the market is informed of any material developments arising from these circumstances."
EARLIER: THE future of the McAleese Group is looking grim as Atlas Iron Limited announces it will shut down mining operations in the wake of falling iron ore prices.
A recent report suggested that the group generated half of its earnings from contracts with Atlas Iron.
A McAleese spokeswoman was unable to make comment in regards to what the loss of Atlas contracts might mean from the company as the group is "currently in a voluntary trading suspension of our shares on the Australian Securities Exchange", however the company has said an announcement will be made soon.
On April 13 McAleese requested suspension of quotation on shares, "pending the release of an announcement regarding the operational and financial implications resulting from the decision by Atlas Iron Limited".
Three days before that statement Atlas announced it would progressively place its Pilbara mines into care and maintenance.
And three days before Atlas made that announcement McAleese confirmed its Bulk Haulage division continued to undertake contracted road haulage and support operations for Atlas Iron.
In a statement the group said McAleese "has a strong and long standing partnership with Atlas Iron and will continue to work constructively with the Pilbara based miner as a priority to achieve sustainable solutions for both parties".
That statement followed Atlas' request to be suspended from official quotation on its shares on April 7.
Atlas' announcement on April 10 said the recent falls in iron ore price would see it suspend mining operations over the month of April and exports would cease shortly thereafter.
Even though the company underwent an extensive cost cutting program the prices had dropped so low that it was no longer viable for production to continue.