Northland's "Useless Logistics Contracts"
Here is some interesting new information from a Swedish logistics journal, in an article titled "Uselss Logistics Contracts Sink Northland" (cut and pasted into Google translate):
"The volumes are significantly less than expected, although it must ailing Northland basically paying full price for the carriers.
It is the surprisingly high operational costs of all logistics costs in Northland Resources, which has caused the acute economic crisis in the mining company, whose future now facing the moment of truth.
Today, we would see the results of the additional issue of 2.4 billion to save the company's ongoing stock.
The crisis of Pajala mine has partly blamed the fall in global iron ore.
- But the crisis depends heavily on the mining company unfavorable logistics contracts, which can not be adjusted downwards during the initial phases of low ore production. It said the company's Chairman Anders Hvide at a telephone conference on 25/1.
It was a law firm in London who designed contracts with subcontractors. Neither Northland or the firm seems to have had sufficient expertise in logistics and transportation procurement.
- It is the reputed law firm Bird & Bird in London who advised Northland Resources at the conclusion of agreements with subcontractors Peab, Savage and Grieg that would ensure the logistics chain for the delivery of iron ore from the mining project. Agreements total value amounts to USD 900 million, or about 6 billion and binds Northland forward to 2021.
Northland has entered into cooperation agreements with Peab AB, Savage Services Corporation, Grieg Logistics AS and Kiruna Wagon Ltd to ensure that Northland's iron ore can be delivered through the port of Narvik in Norway to customers around the world from 2013 onwards.
Shipment of ore from Narvik to as the mining company to begin on Saturday, February 9. The agreements mean that Savage for Northlands bill will coordinate all logistics chain from Kaunisvaara to Narvik and manage rail transport from the trans-shipment center in Pitkäjärvi to Narvik via Malmbanan. Peab handles truck freight from Kaunisvaara to Pitkäjärvi and is also responsible for the construction of cargo terminals Fagernes in Narvik and Pitkäjärvi. Grieg to manage port operations in Narvik and Kiruna Wagon deliver carts to be used on the Ore Railway.
But the volumes of ore has far from lived up to those calculated. Nevertheless, the agreement logistikleveranmtörerna right to basically get full payment.
About 10 000 Swedish retail investors have put money into mining shares as of a few days in January declined in value by about 90%, or from 6 NOK to 60 cents."