Atlas Iron confident
ATLAS Iron is confident enough about demand for iron ore to press ahead with production growth this year despite low prices contributing to a heavy full-year loss.
Atlas currently produces 8 million tonnes per annum, and is on track to raise this to 10 million tonnes by the end of June.
Managing director Ken Brinsden said he was not claiming to be able to compete with iron ore giants such as BHP Billiton, Rio Tinto or Fortescue on cost. But he believed Atlas Iron was more competitive than domestic Chinese producers and Australian miners outside the big three.
He also said China's leadership transition would support strong growth and a strong iron ore price into the future.
"A lot of lot investment decisions will come to fruition as a result of political change," he said.
"Our cost base puts us roughly mid-range in terms of cash costs delivered into China, the 50th percentile of 100 per cent of tonnes available to the Chinese market."
The West Australia Pilbara iron ore miner posted a first-half loss of $256 million, caused by writedowns in the value of several exploration areas.
The emerging Pilbara miner's result for the six months to December 31 was down from a $6.08 million profit in the previous corresponding period.
The loss includes $455 million in charges related to impairments on Atlas' undeveloped Horizon 1 and 2 project areas and other tenements.
Underlying profit in the six months to December of $1 million was down from $62.2 million in the previous corresponding period, as sales revenues dropped because of weaker iron ore prices.
The company said the recent recovery in iron ore prices was generating improved margins, with a cash surplus of $32 million made in January.
Atlas shares were down 5.5¢ at $1.545 on Tuesday.