After meeting its C1 cash costs guidance in fiscal 2016-2017 with an average of A$34.80/wet mt (US$27.59/wmt) FOB, Atlas expects it to rise to A$37-$39/wmt FOB in the current fiscal year, the company said.
Full cash costs are expected to rise to A$54-A$58/wmt CFR China, from A$53/wmt CFR China, it said.
“The expected increase in operating costs is driven by longer road haulage distances, higher sea freight rates and reduced export volumes when compared to FY 2017,” it said.
“The end of collaboration arrangements with key contractors drives a slight increase in C1 cash costs but relieves Atlas of the obligation to pay margin and premium payments to contractors in periods of strong iron ore pricing,” it added.
Its iron ore shipments, meanwhile, are expected to fall but the proportion of lump product, compared to fines, is tipped to increase.
The company is forecasting its shipments of ore at 9 million-10 million wmt, down from 14.4 million wmt in the past fiscal year.
Atlas ceased crushing at Wodgina during the April-June quarter, with iron ore mined tapering off from 1.14 million wmt in the January-March quarter to 180,990 wmt in the June quarter.
The miner did add that it is planning to issue an updated guidance and scheduling for its Corunna Downs project once key approvals are secured.
For its shipped tonnes, lump is expected to make up 3.5 million-3.8 million wmt, while fines is forecast at 5.5 million-6.2 million wmt.
The lump product typically attracts a premium to fines, it said.
Atlas is an independent iron ore company, which exports from its operations in the Northern Pilbara region of Western Australia. Since listing on the Australian Stock Exchange in 2014, it has grown into a mid-sized mining and exploration company.