PERTH (miningweekly.com) – Iron-ore miner Atlas Iron on Friday announced that it would progressively suspend mining at its Pilbara operations during April, with iron-ore exports expected to cease shortly after.

The miner has blamed the significant fall in iron-ore prices.

Atlas earlier this week suspended share trading, announcing a company-wide review of its operations.

However, the company said on Friday that despite an extensive cost-cutting programme, which had saved between A$90-million and A$120-million in yearly costs, the global supply-demand imbalance for iron-ore had driven down prices to the point where it was no longer viable for Atlas to continue production.

As part of its cost-cutting measures, Atlas had reduced staff numbers and accepted the resignation of three of the company's directors, while also reducing the remuneration of the remaining directors by 15%. Further savings were achieved through a range of initiatives, including productivity improvements at the company’s operations.

While the miner has reduced its costs significantly and its break-even price on a benchmark 62% iron basis was currently below $60/t at an earnings before interest, taxes, depreciation and amortisation level, the company’s break-even price remained well above the current spot price.

As a result Atlas would cease mining and crushing at its Mt Webber project next week.

Mining and crushing at the Abydos project was scheduled to cease within 14 days and operations at the Wodgina mine were expected to be completed in late April.

All of the projects would be put on care and maintenance, pending future iron-ore market conditions.

MD Ken Brinsden told shareholders on Friday that the decision to stop production was taken after extensive consideration of the company’s financial position, discussions with contractors and secured creditors.

“To suspend our operations, with the impact that will have on so many committed and talented people, is an extremely difficult decision.”

“I sincerely thank all those who have worked so hard to build Atlas’s production base and those who have worked furiously to maintain Atlas’s competitive position over the past 15 months, in the face of increasingly oppressive market conditions.”

Brinsden noted on Friday that based on the significant percentage of global iron-ore production, which was now cash flow negative, Atlas expected prices would ultimately increase.

However, the miner said that the timing of a recovery was unclear, leaving Atlas with little choice but to take decisive action to protect its balance sheet and resource position.

The ASX-listed miner was in discussions with its creditors concerning options which would enable the company’s mines to restart as efficiently as possible in a circumstance where an operating margin can be re-established, Brindsden said, whether through further cost reduction where possible or improvements in the iron-ore price.

Some 500 people are currently employed across Atlas’s production assets, including direct employees and those of the company’s contractors. Atlas employs a further 75 people in its Perth office.

Prior to the closures, Atlas had been producing at a rate of 12-million tonnes a year, and had flagged plans to increase production to 15-million tonnes a year in future.