From the ABC:
Atlas has responded with a share market release today that outlines a number of contracts it has in place to secure floor prices, at least in the short term.
The company said it has ‘put’ options for 400,000 dry metric tonnes of iron ore which guarantee a price of between $US53-54 a tonne if exercised.
A put option gives the company the right to sell to a buyer at these prices, but not the obligation, meaning that it can still benefit if prices rebound above these levels.
Atlas said it also has around 900,000 wet metric tonnes of forward sales locked in at a fixed price, which it said equates to a benchmark price of about $US59 a tonne.
The company also observed that a further fall in the Australian dollar should provide further revenue benefits to it.
Finally, Atlas said a further 1.1 million wet metric tonnes of sales are covered by a price floor and ceiling arrangement, where the company will receive the equivalent of at least $US50-52 a dry metric tonne but not receive more than $US55-60 per tonne regardless of spot pricing.
That’s nice. What about afterwards when those sales push iron ore to $30?
