IN AN apparent crack at some other miners, Atlas Iron boss Ken Brinsden says the company’s success in the Pilbara is due to its willingness to share and work in partnerships.
“As children we must have been treated differently because we work in the Pilbara and are prepared to share,” Brinsden told a packed room at a WA Mining Club luncheon yesterday.
He said Atlas would never have been able to ship its first ore in 2008 if it had not been for Fortescue Metals Group allowing it to pay to use the port facilities.
These days Atlas ships through the Utah Point facility at Port Hedland, which Brinsden said was another good example of how the company had been prepared to share.
“Utah Point has been an outstanding success,” he said.
Atlas brought its Wodgina mine in the Pilbara into production for a low capital cost of just $A15 million in 2010 due to an infrastructure sharing deal signed with Global Advanced Metals, which operated the neighbouring Wodgina tantalum mine.
“The crusher was operating on campaigns – one campaign tantalum, one campaign iron ore,” Brinsden said.
“That mine was an outstanding success because we were prepared to share and look for win-win outcomes.”
Atlas’ new Mt Webber mine is a 70:30 joint venture with junior explorer Altura Mining and is about to start production.
“We’re right on the cusp,” Brinsden said.
“The guys have been pushing the button on the crusher and we are days away from first ore.”
Mt Webber will initially produce 3 million tonnes per annum, though Atlas has approved an expansion to 6Mtpa.
It is Atlas’ sharing philosophy that Brinsden believes will help the company secure much-needed rail access in the Pilbara to ensure its future expansion plans.
“You shouldn’t bet against us in achieving a rail solution,” he said.
Atlas is on track to meet the upper end of its full-year guidance of 10.2-10.7Mt, but the company’s share price, like its peers, has been hit hard this month by a fall in the iron ore price.
The iron ore spot price hit $US95.70 per tonne overnight, its lowest point since September 2012.
“I don’t want to be the harbinger of doom, but yes, there is a chance it could go lower,” Brinsden said.
He stressed that the long-term outlook was positive, with 300 million people set to be urbanised in China over the next two decades.
“They’re only halfway through a process that has been unfolding for 20 years,” Brinsden said.
Despite the current lows, Brinsden said it was not all doom and gloom and Atlas would push on with its growth like it did during the global financial crisis.
“It’s always darkest before the dawn – but there is opportunity on the other side,” he said.
However, Brinsden angrily hit out at the Maritime Union of Australia, which is threatening strike action in the Pilbara that could cost iron ore miners up to $A100 million a day at a time when the industry was suffering lower margins.
“We should all be offended and up in arms that one union can hold WA and Australia to ransom,” he said.
“These guys already get paid incredibly well.”
Brinsden said that like the rest of the industry, tugboat drivers should be prepared to do their part and “tighten the belt”.
AGO Price at posting:
70.0¢ Sentiment: Buy Disclosure: Held
