Atlas Iron is halting development of its $53 million Corunna Downs project in the Pilbara region due to the recent fall in iron ore prices.
The Perth-based company approved development of Corunna Downs in February when iron ore prices were significantly higher than the current mark of $56.82 a tonne.
However, the company explained that Corunna Downs has been deferred primarily due to market conditions and also because remaining approvals were taking longer than expected.
Atlas believes the deferral will allow it to further de-risk the project in anticipation of improved market conditions.
The company also announced that output at its Mt Webber project will increase from 7 million tonnes per annum (Mtpa) to 9Mtpa, with the boost resulting from processing at its recommissioned Mt Dove site.
Atlas managing director Cliff Lawrenson said by adding 2Mtpa of production at Mt Dove it enabled the company to maintain the production levels it expected in 2017/18 prior to deferring Corunna Downs.
“Corunna Downs remains an important project for the company to sustain its production base and we will proceed with its development when market conditions improve,” Lawrenson said.
Construction of Corunna Downs was expected to cost around $47-53 million, Atlas announced in February.
Iron ore shipments from the project had been forecast to begin in March 2018, with an initial production rate of 4mtpa over its five to six-year mine life.