West Australian miner Atlas Iron plans to start three new mines in WA’s north Pilbara region as part of a $672 million expansion.
Atlas said on Friday that the three mines – Mt Dove, Abydos and Mt Webber – would help boost Atlas’s iron ore exports to 10 million tonnes (Mt) per annum by June 2013 and to 12Mt per annum by December 2013.
Including Atlas’s other assets at McPhee Creek in the north Pilbara, and in the southeast Pilbara, Atlas plans to progressively expand its exports, targeting 46Mt per annum during the 2017 calendar year.
“Atlas has got this fantastic growth profile in front of us,” Atlas managing director Ken Brinsden told reporters.
“We’re going to be incrementally expanding the business and generating strong and growing operating cashflows, which puts us in a really strong position to continue to finance the development of the company.”
Works at Mt Dove will start in June 2012, and production is expected to contribute to Atlas’s shipped tonnes in the December 2012 quarter.
Development of Abydos will start in May 2012, with production from April 2013.
Pending board and environmental approvals, construction at Mt Webber is expected to start in January 2013.
The pit at the Wodgina mine is also being expanded.
Atlas will also build a new road from Wodgina to Port Hedland and expand port facilities at Utah Point.
Atlas said it had already spent $42 million on the expansions, leaving $630 million in capital expenditure to come.
Mr Brinsden said the incremental expansion would be funded from sales of iron ore, and it was not expected that Atlas would have to seek to raise funds.
Atlas also said in Friday that it remains on track to meet its full year production target of 5.5 million to 5.7 million tonnes (Mt).
In the March 2012 quarter Atlas shipped 1.21Mt, down 13 per cent on the December 2011 quarter.
Atlas said Production had been affected by tropical cyclones Heidi and Lua and a breakdown of the Utah Point ship-loading facility in January.
The average price per tonne for the three-month period was $US124 ($A120).
“Atlas remains on track to ship approximately 5.5Mt to 5.7Mt for the 2012 financial year,” Atlas said in its quarterly production report.
The iron ore miner said that despite lower shipped volumes in the March 2012 quarter, costs per tonne remained consistent with guidance for the 2012 financial year at $42 to $45.
Atlas said it continued to engage with other Pilbara miners in relation to rail infrastructure.
The company has entered into an agreement with rail operator QR National to conduct a feasibility study into the construction of an independent railway in the Pilbara region.
Shares in Atlas were 1.0 cent higher at $2.88 at 1315 AEST on Friday.
