Cliffs’ Asia Pacific Iron Ore (APIO) business, comprising the Koolyanobbing mine in Western Australia, lowered its cash costs to around $US43 per tonne in the December quarter, down $10/t from September.

The weaker Australian dollar contributed around $4/t of the drop.

“The intense depreciation of the Aussie dollar against the US dollar has helped lower the production and operating costs of all Australian iron ore producers, including our Cliffs Koolyanobbing mine,” Goncalves said on a conference call overnight.

“That will continue to positively impact our APIO results going forward as the Australians have very little to do at this time beyond continuing to manipulate their currency.”

The Aussie dollar hit a six-year low of 76.51c yesterday.

“The Australians are taking no prisoners with the Aussie dollar,” Goncalves said.

“So the Aussie dollar will continue to help APIO because they don't want to help APIO.

“They want to help BHP. They want to help Rio Tinto. They want to help that lady over there, Gina whatever [Rinehart]. They are going to continue to help Fortescue.

“And they will believe that they will always crash the Chinese producers. Big mistake, but it is what it is.”

Goncalves noted that despite the weaker currency, Australian mines were already shutting down and jobs were being lost.

“The consequence of the glut promoted by the majors will be seen for several years and we are happy that we are strategically removing Cliffs from the seaborne trade of iron ore in the near future,” he said.

Cliffs is positioning itself to focus on US iron ore and its domestic steel market, while the Australians and Brazilians would be “bleeding like crazy in the next couple of years”

“The Australians don't know what to do anymore. They are putting even the kangaroos for sale,” Goncalves said.

“And the iron ore price is not going anywhere at this point. And they are expected to manipulate their currency and the situation has started to smell bad over there.”

Goncalves said it was stupid to bet against America.

“We are going to be the best iron ore mining company, the most profitable, the most reliable, the most predictable in the world,” Goncalves said.

“And that's what we are positioning ourselves for, to be standing tall when others will be dealing with the mistakes that they are making as we speak.”

But Goncalves was confident Koolyanobbing in Australia would survive to the end of its life.

“Only the low-cost producers will stay in business in Australia, and our Koolyanobbing mine is one of them,” he said.

“Due to the severe cost-cutting initiatives implemented in our Australian business, APIO continues to generate good EBITDA.”

EBITDA for the December quarter was $30.1 million, while adjusted EBITDA for the full year was $264.6 million.

The company had announced plans to sell Koolyanobbing last year but sources say the asking price was too high.

“Just to reiterate our strategy for our APIO business, we don't have to sell the Koolyanobbing mine, even though we have no plans to continue in Australia beyond the end of the remaining five years of mine life,” Goncalves said.

“The total capex necessary during this five years is only $50 million and then we will completely exit the Australia-China trade.

“In the meantime, we are totally confident that our Koolyanobbing mine is as good as or better than the major global iron ore producers due to their massive capital needs, a need our Australian operation does not have.”