Large amount of iron ore is flowing out of Western Australia due to the increased production rate by the major iron ore producers including BHP Billiton. During Thursday, Atlas Iron, one of the majors reported their big iron ore volume increase over the next 12 months.
The miners are increasing the iron ore production to overcome the tough conditions prevailing in the market including iron price declination due to the stabilizing Chinese demand. The miners are seeking productivity plays.
Atlas Iron during Thursday reported that it had shipped a record 3.1 million tonnes in the period of three months to June, increased from 2.73 million tonnes produced in the previous quarter. During the previous financial year the company shipped about 10.9 million tonnes at all-in cash price of $76.8 per tonnes.
The company said that it is going to address current financial year through improved production capacity and scale. The major iron ore companies have ramped up their operations for beating the hard market conditions. Further reduce in the cost per tonne will provide Atlas a little more wriggle room if the price of iron falls again.
Atlas, the major iron ore company will produce between 12.2 and 12.8 million tonnes at a considerably lower all-in cash price between $68 and $73 per tonne over the 12 months from June. Due to ramp up operations, the iron ore volumes have increased by 47 pct YoY. The Mount Webber operations are also ramping up and it is on progress to increase the production from 3 to 6 million tonnes annually.
Atlas MD Ken Brinsden said that this results highlight the company’s ability to not only endures what has unquestionably been a difficult market in recent months, but also to improve despite this environment.
He added that this financial year would be a turning point for the company. The company will increase the production of high garde iron ore to fulfill the market demands. Over the financial year, BHP Billiton produced more than 200 million tonnes, increasing about 20 percent year on year. The major mining company is planning to increase the volume to 225 million tonnes through ramp up operation at its Jimblebar mine in Pilbara region, WA.