TORONTO (miningweekly.com) – Spain-focused iron-ore project developer Iberian Metals has regained full control over the Cehegin iron-ore prospect, in the south-west of the country, after joint venture (JV) partner Glencore relinquished its 20% interest in the brownfield project.

Calgary, Alberta-based Iberian on Wednesday reported that the project partners had decided to part ways by mutual agreement, under which Iberian’s Spanish subsidiary Solid Mines Espana (SME) acquired interest in holding company Cehegin Iron Ore Holdings (CIOH) for “nominal consideration”.

Under the terms of the acquisition of Glencore’s 20% interest in CIOH, each of the parties had agreed to terminate all previous agreements related to the JV agreement signed in June 2014, with the exception of Glencore’s exclusive offtake agreement, which would remain in effect.

“The company is very pleased with the outcome of this new arrangement with Glencore. Being able to regain 100% ownership of the project and retaining Glencore’s marketing and sales expertise is very beneficial. Having the working capital available has allowed us this opportunity and we are continuing with the next stage of development,” Iberian president and CEO Greg Pendura stated.

The Cehegin mine produced four-million tonnes of 65% iron content, low-impurity iron-ore between 1975 and 1989. Exploration had suggested the deposit to hold a magnetite resource of between 25-million tonnes and 30-million tonnes, or more.

According to Iberian, the price of 65% iron-ore had fallen from around $100/t to $60/t since the start of the year, as significant producers, including Rio Tinto, BHP Billiton and Vale ramped up output with the intent of eliminating inefficient Chinese producers.

Mining Weekly Online had earlier this month reported that low-cost oversupply, an overhang in steel inventories and, at the macro level, weakened Chinese manufacturing data had slowed iron-ore project development to a crawl.

In the iron-ore development space, only projects, such as Cehegin, deemed to have a premium product or the potential for the lowest of operating costs had retained the market’s interest.

However, Iberian remained confident in the project's product, saying that an abundance of cheap, low-grade (56% to 62% iron content) would not displace premium grade (+62% iron) demand. Steel mills in Europe and Asia insisted on premium grade iron-ore in their battle with pollution and plant efficiencies.