Atlas Iron Ltd will partner with Altura Mining Ltd in a $146 million joint venture at Mt Webber in Western Australia's Pilbara region.
In a statement to the Australian Securities Exchnage, Altura said it had reached an agreement with Atlas to construct and develop the direct shipping ore (DSO) mining operation with first shipments planned for the second quarter of 2014.
Atlas Iron will hold a 70% stake in the joint venture and manage the operations. The 30% balance will be held by Altura.
Once operational, the Mt Webber project will produce three million tonnes per annum of DSO material, which will be sold through the Port Hedland export facility in north-western Australia (see Tim Treadgold's Is it iron curtains for small producers?).
The statement added the project is fully funded by Atlas's cash at bank and that Altura will finance its share of the capital cost through a finance package provided by Atlas.
The loan will be repaid through Altura's share of ore sales proceeds from Mt Webber.
The total capital for the Mt Webber operation is estimated to be $146 million.
"Current estimates place Altura’s contribution to the capital cost to be $5 million," the group said.