Photo by: Bloomberg
PERTH (miningweekly.com) – Iron-ore miner Atlas Iron has signed new sales contracts for 2014, for its Pilbara direct shipping ore product.
The miner said on Wednesday that the contracts pertained to exiting production rolled-over, and for ore from Atlas’ 2014 expanded production base.
The contracts range from 400 000 t/y to 1.2-million tonnes a year, with some optionality for Atlas to provide additional tonnage as production allows. The contracts span a duration of between one and three years, and have been signed with a mixture of new and existing counterparties, which include Chinese steel mills and trading houses.
“It is very pleasing to see such strong demand across Atlas’ product range. We are pleased with the improved financial terms Atlas has achieved in these contracts, which reflect both the reputation of Atlas as a reliable supplier and the strong relationship our marketing team has developed,” said Atlas MD Ken Brinsden.
The price Atlas would receive for its product would be calculated by a reference to the 62% iron index, adjusted for iron content and quality. Consistent with the strong demand that Atlas has registered during the negotiation period, the average discount for quality has reduced materially in the new contracts, Brinsden said.
Atlas is currently working on its Horizon 2 expansion plans, which will take the company’s output from 10-million tonnes a year to 15-million tonnes a year and beyond. The projects include McPhee Creek, where a prefeasibility study is under way. The study is targeted for completion by the March quarter of next year.