Atlas signs two offtake deals for Pardoo

Pilbara miner Atlas Iron has signed two new offtake deals with Chinese steel mills covering a further 50 per cent of iron ore from its Pardoo project.

The offtake deals with the two medium-sized steel mills cover a three-year period with the iron ore price referenced to the long-term benchmark price.

The deals also include an adjustment mechanism which applies only in the even that spot prices and benchmark prices "materially diverge".

"Once activated this mechanism serves to adjust the sales price mid-way to the spot price, in order to maintain the fairness of contract pricing to both parties," Atlas said.

Atlas will arrange shipments to the steel mills, with the company to be reimbursed when ore is delivered.

First shipments will be completed by the end of June this year,

In December last year, Atlas secured its first offtake deal for Pardoo covering 30 per cent of the iron ore.

Atlas today said a further offtake agreement for the remaining Pardoo iron ore is expected to be executed shortly.