Delays possible at Grange's Southdown: analyst

A business commentator says major issues facing the iron ore market have increased the likelihood of Grange Resources' Southdown project being delayed or shelved.

Significant falls in the iron ore price have already had a large impact across Australia and led to the delay of the Mid West's Oakajee project.

Grange's share price has plummeted 60 per cent in eight months but the company says it remains committed to open its magnetite project near Albany.

Analyst Tim Treadgold says the Oakajee issues have emphasised the sector's struggles and increased the likelihood of Southdown having problems.

"Grange has heavy weights to lift, it has to raise a lot of money which is very difficult in this climate," he said.

"It has to win a market, it has to build a port, it has to do a lot of things which a plain, vanilla iron ore mine doesn't have to do; that makes it very, very difficult to get up." Mr Treadgold says it is a wait and see period for the sector.

"You are seeing a large number of projects shelved," he said.

"We are entering a period of waiting; you would be wise to assume that not much is going to happen in the iron ore space, apart from projects being postponed, in the next six to 12 months."

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