JOHANNESBURG (miningweekly.com) – Having decided to slow down development at its main Askaf iron-ore project, in Mauritania, in October, Glencore subsidiary Sphere Minerals reported a net loss of $14-million from continuing operations after income tax for the year ended December 31, compared with a loss of $311.9-million for the previous financial year.

Addressing shareholders at Sphere Minerals’ annual general meeting on Thursday, MD Jyothish George noted that the company had decided to defer development at Askaf and put exploration activities on hold for all projects in response to a collapse in global iron-ore prices.

During the year, the price of iron-ore fell to an historic low of $38/t in China and, overall, prices dropped by more than 40% in 2015, following an almost 50% drop in 2014. This was mainly attributed to increased tonnage from majors and an of easing Chinese steel consumption.

Citing economic modelling, George added that there was no prospect for profitable development at Askaf and the company had, therefore, acted accordingly to minimise losses.

The ASX-listed company had last year entered into an exclusive option with Australian minerals company Al Rawda Resources to buy an 80% interest in the Askaf project for $10-million in cash, plus a life-of-mine royalty of 2.5% of free on board revenue. Al Rawda was continuing with due diligence and the option had been extended to September 30.

Though the sell down of Askaf would result in Sphere holding only a non-controlling interest in the asset, the company directors believed that the transaction with Al Rawda would provide the project with the best chance of being developed and returning value to Sphere shareholders.

“While the decision to suspend the Askaf project was a large setback for Sphere, it has allowed the company to minimise spending at a time of low prevailing iron-pre prices in the international seaborne iron-ore market,” said George.

He added that the company had raised A$205.1-million in October, with the ongoing support of major shareholder Glencore, which enabled Sphere to repay its loan and fund operations until the end of 2016.