Fenix Resources Secures 30-Year Weld Range Deal, Sets Record Shipments

Record Operational Performance

Fenix Resources Ltd (ASX, FEX) reported a landmark September quarter, shipping a record 885,000 wet metric tonnes (wmt) of iron ore, a 17% increase from the previous quarter and more than double the volume from the prior corresponding period. This milestone underscores the scalability of Fenix’s integrated mining, logistics, and port operations in Western Australia’s Mid-West region.

The company successfully commissioned its third mine, Beebyn-W11, which contributed its maiden shipment in August. With steady state production targeted for the December quarter, Beebyn-W11 is expected to be a key driver in Fenix’s ambition to triple production to 4 million tonnes per annum (Mtpa) during 2025.

Transformational Weld Range Agreement

Perhaps the most significant development was the execution of a 30-year exclusive Right to Mine Agreement with Sinosteel Midwest Corporation, a subsidiary of Baowu Steel Group, the world’s largest steel producer. This agreement grants Fenix access to the Weld Range Iron Ore Project, which holds a substantial 290 million tonne resource at an average grade of 56.8% iron.

This long-term partnership not only extends Fenix’s mine life but also positions the company as a mid-tier iron ore producer with a commitment to maintain production of at least 6 Mtpa from the Weld Range Project. The deal includes a $60 million cash consideration payable over two years, alongside production and profit share royalties, funded from existing cash reserves and operational cash flows.

Financial and Operational Discipline

Fenix maintained its FY26 guidance of 4.0 to 4.4 million tonnes of iron ore sales at a Group C1 cash cost between A$70 and A$80 per wet metric tonne, despite the ramp-up costs associated with Beebyn-W11. The reported Group C1 cash cost for the quarter was A$75.7/wmt, comfortably within guidance and 4% lower than the prior corresponding quarter, reflecting ongoing operational efficiencies.

The company’s cash position strengthened slightly to A$57.7 million by quarter-end, supported by robust operational cash flows of A$43.9 million. Fenix also secured hedging contracts for 720,000 tonnes of iron ore at an average price of A$153.18 per tonne through to June 2026, providing revenue certainty amid volatile commodity markets.

Strategic Growth and Market Positioning

Fenix’s integrated pit-to-port model continues to demonstrate resilience and scalability, with logistics volumes increasing 16% quarter-on-quarter to 932,000 wmt. The company’s marketing strategy has evolved alongside its expanding product portfolio, enabling it to optimise product mix and realise premium pricing, particularly through a higher ratio of lump ore shipments.

Additionally, Fenix’s 37% stake in Athena Resources is advancing a premium iron concentrate project aligned with the emerging Green Steel market, further diversifying its growth avenues.

Looking Ahead

With feasibility studies underway for the Weld Range Project and steady progress on Beebyn-W11, Fenix is well positioned to accelerate production growth and extend mine life. The strategic partnership with Baowu offers not only operational scale but also potential for further collaboration and expansion in the Mid-West region.