Atlas Iron gets royalty relief from Western Australian government
Australian junior miner Atlas Iron is set to gain access to A$12.5 million ($10 million) worth of funds after it accepted the Western Australian government’s offer of a deferral of royalty payments.
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The relief package will enable Atlas to defer 50% of its royalty payments in the twelve months ending September 30 2015, subject to it achieving a received price of less than A$90 ($71) per dry metric tonne in each quarter, according to the miner’s announcement last Friday May 22.
However, it must repay the deferred royalties in seven equal quarterly instalments, with the first repayment due on March 31 next year, and the last one, on September 30 2017.
The A$12.5 million ($10 million) are a refund of royalties it paid in the December 2014 and March 2015 quarters, it said.
It expects the relief package to provide it a “cash flow benefit of approximately A$23 million ($18 million)”.
Atlas’ md Ken Brinsden noted that the royalty relief package supported Western Australia’s iron ore export industry, “providing jobs, production diversity and ultimately further support for regional communities and the state”.
“In conjunction with the landmark cost-cutting deal announced last week, this royalty relief significantly strengthens Atlas’ cash position as we continue to build towards our year-end production target of 14-15 million tpy,” he said in a statement.
Earlier this month, Atlas said it would return to full production in the September quarter. The move came after it announced a progressive shutdown of its mines in April.
Atlas shipped 3.4 million wet metric tonnes (wmt) of fines graded at an average of 56.61% Fe in the first three months of 2015, it said in a quarterly report published on May 1.
Metal Bulletin’s 58% Fe Premium Index stood at $53.36 per tonne cfr Qingdao on Friday May 22, compared with $61.82 per tonne on January 2. The index hit a record low of $41.07 per tonne on April 2.
Last month, fellow Australian miner BC Iron became the first beneficiary of the Western Australian government’s temporary assistance to junior miners.