28/04/2014 - 10:16

McAleese increases work with Atlas Iron

28/04/2014 - 10:16

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McAleese Resources has announced it will double its road haulage for Atlas Iron's Mt Webber mine.

McAleese increases work with Atlas Iron
Atlas Iron managing director Ken Brinsden

McAleese Resources has announced it will double its road haulage for Atlas Iron's Mt Webber mine.

Atlas Iron’s Mt Webber mine is being expanded to produce 6mtpa by January 2015.

Atlas Iron shipped a record 2.7mt in the March 2014 quarter and is on track to meet the higher end of its full year production guidance range of 10.2-10.7mt.

The shipping record helped Atlas export more iron ore in the nine months to March 2014 than it did throughout the previous entire financial year.

Atlas Iron is targetting an annual production of 15mt, which would make it Western Australia’s fourth largest iron ore miner, well behind mining giants Rio Tinto (targeting 360mtpa), BHP Billiton (targeting 270mtpa), and Fortescue Metals Group (targeting 155mtpa).

McAleese will begin hauling Atlas’ iron ore from the Mt Webber mine by the middle of this year.

The haulage agreement is McAleese’s fifth contract with Atlas and undertakes haulage for all of its iron ore.

Atlas is scaling down its Mt Dove and Pardoo mines, but said in its March quarterly report it is on track to increase overall North Pilbara production.

Mt Webber's additional 3mtpa will provide McAleese with more than $220 million in extra revenue over the four year agreement.

McAleese Resources parent company McAleese Group will invest around $30 million in operating equipment and supporting infrastructure during the second half of this year.

Atlas has rights to up to 15mtpa of capacity at Utah Point port.

Earlier this month Atlas repeated that discussions relating to a third-party rail haulage agreement were progressing and remained confidential.

Should new port facilities be built at Port Hedland, it will also be able to access 63 per cent of its interest in North West Infrastructure’s 50mtpa of capacity.

McAleese Group shares were down 3.3 per cent to 58 cents at 10.10WST.

Atlas Iron shares were down 1.8 per cent to 95.7 cents.

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