Mount Gibson’s Koolan Island Rockfall Sparks Major Job Cuts and Guidance Withdrawal
Mount Gibson Iron suspends mining at Koolan Island following a significant rockfall, withdrawing FY26 sales guidance and initiating workforce reductions while advancing rehabilitation efforts.
- Significant rockfall at Koolan Island halts mining operations
- Mining deemed unviable to resume due to safety and economic factors
- Approximately 450 job losses including contractors and employees
- Processing continues using existing ore stockpiles
- Central Tanami Gold Project acquisition remains on track
Rockfall Incident Forces Operational Shift
Mount Gibson Iron Limited has announced a suspension of mining activities at its Koolan Island operation following a substantial rockfall on the eastern footwall of the Main Pit on 16 October 2025. Fortunately, no personnel were harmed, thanks to continuous radar monitoring and swift implementation of an exclusion zone. However, the incident has prompted a thorough reassessment of the site’s viability.
After extensive evaluation, including consultation with external geotechnical experts, the company concluded that remediation and resumption of mining are not feasible. The risks of further instability, combined with the limited remaining mine life, originally scheduled to end in September 2026, render continued mining unsafe and economically unjustifiable.
Transition and Workforce Impact
Mining operations will remain suspended, but processing will continue using existing ore stockpiles and lower-grade materials previously set aside for blending. Concurrently, Mount Gibson will accelerate progressive rehabilitation efforts to responsibly manage the site’s closure. This transition will affect the workforce significantly, with approximately 250 employees and 200 contractors facing redundancies. The company has committed to paying all entitlements in full and providing support to impacted personnel.
Financially, the transition is expected to cost between $30 million and $40 million, encompassing rehabilitation activities and other related expenses. The company’s rehabilitation provision for Koolan Island stood at $59.6 million as of 30 June 2025, covering infrastructure removal and potential future uses of retained assets such as the airstrip and accommodation facilities.
Strategic Focus Shifts to Central Tanami Gold Project
Importantly, the rockfall incident does not affect Mount Gibson’s planned acquisition of a 50% stake in the Central Tanami Gold Project, expected to complete by March 2026. The company intends to redeploy some Koolan Island personnel and equipment to support this new venture, signaling a strategic pivot towards gold mining and diversification of its asset base.
CEO Peter Kerr expressed regret over the premature ramp-down at Koolan Island but emphasised that safety remains paramount. He also highlighted ongoing collaboration with the Dambimangari Traditional Owners and other stakeholders to ensure a responsible transition and lasting positive legacy in the region.
Mount Gibson’s financial position remains robust, with cash and investments totaling $473 million as of 30 September 2025 and no bank borrowings. However, the company has withdrawn its sales guidance for FY26, reflecting the operational uncertainty at Koolan Island.
Bottom Line?
Mount Gibson’s Koolan Island setback underscores the challenges of mining safety and economics, setting the stage for a strategic shift towards gold.
Questions in the middle?
- What are the long-term financial implications of the accelerated rehabilitation costs?
- How will the workforce transition impact operational efficiency at the Central Tanami Gold Project?
- Could retained infrastructure at Koolan Island be repurposed for future mining or alternative uses?
