Mount Gibson Iron Limited Halts 80 Year Old Koolan Island Mine After Rockfall

Highlights:

• Mount Gibson Iron Limited (ASX: MGX) shares plunged 28% at the time of writing after announcing the shutdown of its 80-year-old Koolan Island iron ore mine in Western Australia following a major rockfall.
• The closure will result in about 450 job losses, including 250 permanent staff and 200 contractors, as the company moves to process remaining stockpiles and begin site rehabilitation.
• The shutdown has forced Mount Gibson Iron to withdraw its FY26 sales guidance and underscores the growing operational risks in Australia’s ageing open-pit mining operations.

Unexpected closure of landmark mine

At the time of writing, Mount Gibson Iron Limited (ASX: MGX) has decided to shut down operations at its historic Koolan Island iron-ore mine in the Buccaneer Archipelago off Western Australia, citing a major rockfall on October 16 that damaged the eastern pit wall and rendered further extraction “not viable”. The move brings an untimely end to the mine’s life, which had been scheduled for closure around September 2026.

Heavy impact on workforce and finances

The closure forces approximately 450 jobs to be cut, as around 250 permanent staff and 200 contractors are being made redundant, while only about 75 employees remain on site to process stockpiles and manage rehabilitation. The company has also withdrawn its fiscal 2026 sales guidance of 3.0-3.2 million wet metric tons (wmt) after confirming that mining cannot safely continue. Shares of Mount Gibson plunged nearly 28% as markets reacted to the abrupt shutdown.

Broader implications for the company and region

The mine on Koolan Island has long been a high-grade hematite asset and significant regional employer. Its early closure underscores the operational and geological risks inherent in open-pit mining in remote locations. The abrupt transition forces Mount Gibson to accelerate its pivot to other ventures, including its planned 50% interest in the Central Tanami Gold Project in the Northern Territory, while handling the environmental and community obligations of mine ramp-down. For the Kimberley region, the job cuts represent a blow to local employment and service sectors tied to the mine’s fly-in/fly-out operations.

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