May 17, 2020

Atlas Iron's Mount Webber mine already producing results

Mount Webber
Western Australia
Iron ore
2 min
The Mount Webber mine was previously closed in April after the price of iron ore fell considerably.
As was recently written in Mining Globals sister siteBusiness Review Australia, Atlas Iron hasrestored its mining operations at its Western Australia Mo...

As was recently written in Mining Global’s sister site Business Review Australia, Atlas Iron has restored its mining operations at its Western Australia Mount Webber mine.

The mine was previously closed in April after the price of iron ore fell considerably. Now with Atlas back up and running with all three of its mines back in production, the company’s year-end production rate goal of 14-15 Million tonnes per annum (Mtpa) appears attainable.

According to the company, Mount Webber is expected to produce six million tonnes of iron ore for each of the next eight years due to significantly improved margins compared to prior to operating suspension.

RELATED TOPIC: Top 10 Iron ore producers based on 2015 guidance

At its other Pilbara region mines, Wodgina and Abydos, Atlas agreed to a contractor collaboration method, where contractors can earn a bonus in their rates once the iron ore price increases. The companies would be entitled to 25 per cent of applicable positive net operating cash flows.

Atlas has made attempts to reassure investors of its financial stability, undertaking a $180 million capital raising. In a recent market update, Atlas said 2.06 million wet metric tonnes (70 per cent) for the September quarter and 0.4 million wmt (10 per cent) for the December quarter were subject to price insulation.

RELATED TOPIC: The End: Atlas Iron to Close Mining Operations

Atlas said it has ‘put’ options to provide a floor price on 400,000 dry metric tonnes of iron ore, which will guarantee a price between US$53-54 a tonne if exercised. A ‘put’ option gives the company the right to sell to a buyer at these prices, so it can still benefit if prices stay above those levels.

In addition, the company has about 900,000 wmt of future sales locked in at a certain price, which Atlas says equals a starting price of about US$59 a tonne. It will earn even more revenue if the Aussie dollar falls further.

RELATED TOPIC: NSW: Coal exports continue to grow thanks to emerging markets

Another 1.1 million wmt of sales are covered by a price floor and price ceiling agreement, as the Atlas will receive the equivalent of at least US$50-52 but no more than US$55-60 dry metric tonnes regardless of spot pricing. This deal decreases the company’s exposure to market instability while it finishes up its capital raising and ramp up in production.

However, while these deals give Atlas a safety net, there won’t be much protection past October.

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Jul 20, 2021

British Lithium Pressured Due To Calls for Electric Cars

3 min
The ever-increasing need for electric vehicles is mounting pressure on British Lithium as the 2035 deadline inches closer

The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change. 

It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.

British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad. 

Competition For Lithium Rises In Europe 

After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company. 

“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”

Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector. 

Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial. 

Cornish Mining Revival For Lithium Production

“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”

The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction. 

Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably. 

“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.

“Europe from a strategic point of view should be looking at securing its own supply of lithium.”

Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK. 

“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”

Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.

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