Atlas Iron has released its Q3 production update and it’s an admirable effort:
All-in cash costs* A$68.90/wmt CFR for the September 2014 Quarter, down from $75/wmt in the June 14 Quarter
> C1 cash costs $48.10/wmt (wet basis, FOB and excluding royalties) for the September 2014 Quarter, down from A$51/wmt in the June 2014 Quarter
> Average headline price of US$69.62/dmt CFR received for Standard Fines over the September 2014 Quarter, after adjusting for US$5.24/dmt of negative provisional pricing adjustments
> Competitive product discount of circa 10% achieved, resulting in average headline price of A$70.83/wmt CFR received for Standard Fines over the September 2014 Quarter
> FY2015 all-in cash cost guidance reduced to A$65-$70/wmt CFR (previously A$68-$73/wmt CFR)
> FY2015 C1 cash cost guidance reduced to A$46-$49/wmt FOB (previously A$47-$50/wmt FOB)
> Reduced FY2015 capex to A$94M, from A$125M
> Updated FY2015 production guidance of 12.4Mt – 13Mt, from 12.2Mt – 12.8Mt
> 3.1Mt wmt shipped for the September 2014 Quarter (June 2014 Quarter 3.1Mt) comprising 3Mt of Standard Fines and 0.1Mt of Value Fines
So far as I’m aware, Atlas is a direct shipping ore operation only, which means it doesn’t process and dry its output. That is why its achieved price is so low. If it gets $69 when benchmark averages $90 then all things equal with iron ore now in the low 80s it is currently getting about $64 per tonne and according to its own guidance is on or just below breakeven.
The bad news for everyone else is that means the iron ore price deck has to keep sinking!
