PERTH (miningweekly.com) – Iron-ore miner Atlas Iron has reported another fall in sales volumes during the three months to March, as wet weather and the closure of the Abydos mine impacted on production.

Atlas shipped 2-million tonnes of ore during the March quarter, down from the 2.2-million tonnes shipped in the December quarter. The shipped volumes comprised of 900 000 t of fines and 1.1-million tonnes of lump.

Atlas MD Cliff Lawrenson told shareholders on Tuesday that the March quarter performance was impacted by a series of adverse market conditions.

“We were squeezed by a combination of factors including the impact of the significant ongoing discounts applied to lower-grade iron-ore, the impact of provisional pricing estimates after the rapid fall in forward prices late in the quarter, and higher unit operating costs stemming from our reduced production volumes.”

C1 cash costs during the quarter increased from A$38/t to A$41/t, owing to increased waste movement while developing new mining areas at the Mt Webber operation, a longer average trucking distance to the port following the closure of the Abydos mine, as well as lower volumes impacting fixed cost dilution.

Lawrenson said that the company sought to offset these difficult conditions by keeping costs tight wherever possible and upgrading the quality of Atlas’ final product.

“As part of this, the company is on track to export lithium direct shipping ore (DSO) before the end of this financial year, and we shipped our first manganese exports in April.”

During the quarter, Atlas signed a deal with Horseshoe Manganese to purchase up to 100 000 t of crushed manganese over a four-month period, loading it into a dedicated hold of vessels chartered for iron-ore.

The company also signed offtake agreements with Sinosteel Australia for the export of lithium DSO sourced from the Pilgangoora lithium project, being developed by ASX-listed Pilbara Minerals.

Atlas will sell up to 1.5-million tonnes of lithium DSO to Sinosteel over a 15-month period on a fixed price basis. Atlas has mobilised a second crusher to the Mt Dove operation in preparation for the start of lithium DSO exports in the June quarter.