Atlas blasts market 'over-reaction'Atlas managing director Ken...

Atlas blasts market 'over-reaction'

Atlas managing director Ken Brinsden offered a fierce defence of the iron ore sector, which he said had far better credentials than most investors and commentators believed.

The iron ore price averaged a very healthy $US148 per tonne during the March quarter, and has only fallen about 12 per cent since it hit $US158 per tonne in February.

But iron ore stocks like Atlas have fallen by close to 50 per cent since February, as investors bet on the iron ore price declining further in the near future as supply from new mines increases.

Mr Brinsden said there had been a ''gross over-reaction to the negative'', and investors would soon discover that new iron ore mines would prove harder to bring into production than most people thought.

''The so-called specialists are overstating what's possible on the supply side,'' he said.

BusinessDay reported last month that Atlas was increasingly likely to strike a rail access deal with Fortescue Metals Group rather than participate in the construction of a new, multi-user railway in the Pilbara.

Mr Brinsden said yesterday that both options remained on the table, but again pointed to the fact that the Fortescue option would be available sooner.

"You don't have to be a rocket scientist to work out FMG's network is already on the ground,'' he said.

Atlas exported just under 2 million tonnes of iron ore in the March quarter, and remains on track to export between 7.4 and 7.7 million tonnes in the year to June 30.

But investors continue to sell the stock, which has fallen today by close to 4 per cent to 97.25 cents.
That price is Atlas' lowest for more than four years.

Copper producer Sandfire has also suffered steep share price falls in recent months, falling from just under $9 in January to below $6 today.

Today's March quarter results have failed to stem the tide, with the stock falling another 21 cents to $5.88.

Read more: http://www.smh.com.au/business/mining-and-resources/paladin-shares-plumb-eightyear-lows-20130417-2hzrc.html#ixzz2Qh4MDBfq