The flood of iron ore flowing out of Western Australia won’t be stopping this financial year with producers, including BHP and today Atlas Iron, flagging big volume increases over the next 12 months.
Dealing with tougher market conditions, including the dropping iron ore price, which is largely being driven by stabilising Chinese demand, miners are ramping up production and looking for productivity plays. There’s more recent iron ore price movements here.
Today releasing its June quarter results, Atlas Iron revealed it shipped a record 3.1 million tonnes in the three months to June, up from 2.73 million tonnes achieved in the previous quarter.
Over the financial year the miner shipped 10.9 million tonnes at an all-in cash cost of $76.8 a tonne. The miner’s costs are at the higher end of Australia’s iron ore cost-per-tonne spectrum, a factor Atlas said it is looking to address this financial year both through productivity and scale improvements as operations ramp up.
Reducing its cost-per-tonne will give Atlas a little more wriggle room if the iron ore price tumbles again.
Atlas is expecting to move between 12.2 and 12.8 million tonnes over the 12 months from June at a slightly lower all-in cash cost of between $68 and $73 a tonne. Volumes were already up 47% year-on-year with new operations, including Mount Webber, ramping up. Works are also under way to boost production at the site from 3 to 6 million tonnes a year.
Operating in a tougher iron ore market, Atlas MD Ken Brinsden said, “These results highlight Atlas’ ability to not only endure what has unquestionably been a difficult market in recent
months, but also to grow despite this environment”.
“This financial year will mark a key turning point in Atlas’ growth,” Brinsden said, adding it will be boosting production of higher grade ore to meet market demands.
“After a period of substantial investment in project development, we are now poised to benefit from the increased production and lower costs being delivered by that strategy,” he said.
BHP Billiton on Wednesday released its June quarter operating report, producing over 200 million tonnes of iron ore over the financial year, a 20% increase year-on-year to beat full-year guidance by more than 8%.
The diversified miner expects iron ore volumes to lift to 225 million tonnes over this financial year with its Jimblebar mine in WA’s Pilbara region continuing its ramp up.
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