Pilbara iron ore producer BC Iron is making deeper cost cuts as it weathers a falling iron ore price.
The Perth-based company is issuing fresh workforce tenders on a new mining hub in the Pilbara and lowering its full year production cost guidance.
BC Iron is hoping the weaker labour market will lead to savings as it goes to tender to mine the Warrigal hub at its Nullagine mine where contractors Watpac and Toll currently operate.
Chief executive Morgan Ball says falling oil prices and a weaker Australian dollar have helped the miner maintain positive margins as some other mid-tier companies lose money.
"The next round of material savings will come in our retendering of existing contracts," Mr Ball told AAP.
"We're expecting a reduction in the overall cost of mining and potentially haulage."
In December, BC Iron cut dozens of jobs at Nullagine, a joint venture with Fortescue Metals.
The iron ore price has now slumped to a fresh five and a half year low of $US63 per tonne.
After finding savings of between $2 and $3 per tonne during the quarter, the miner has revised down its full year cash costs guidance from between $49 and $53 per tonne to between $47 and $51 per tonne and is targeting all-in costs of between $54 and $61 per tonne, down from between $64 and $70 per tonne previously.
BC Iron received an average price of $US60 a tonne for its iron ore during the quarter, but lifted production 90 per cent to 1.69 million tonnes after an operations slow-down during the September quarter.
Mr Ball conceded the company would probably be losing money now if the currency had not experienced recent falls.
"Notwithstanding the iron ore price reduction BC Iron has managed to maintain a positive operational margin even through this period and that's been assisted by the oil price and freight rates and the exchange rate," he said.
Overall, he said mid tier Pilbara producers were faring reasonably well.
"In a really tough in environment we're all doing a really good job and keeping on punching," he said.
The company has around $70 million in net cash which Mr Ball says makes it well placed to deal with lower prices.
BC Iron has also commenced work on its new acquisition, Iron Ore Holdings (IOH), and made a variation to the agreement which ensures will generate earnings in a soft iron ore market.
Shares in the company dropped 1.5 cents to 46.5 cents.
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