Australia's Atlas Iron said Tuesday it would double production at its Mt Webber mine in north Pilbara to 6 million mt by the end of the December quarter, now that the board has approved development of the project's second stage.
Construction of the mine's first stage began late last year and exports of first ore are on track to start in the June quarter, the company said.
Atlas also adjusted down its estimate for life of mine operating costs, to A$49-51/mt (US$44-46/mt), compared with the A$56/mt originally estimated for the first stage.
Atlas Managing Director Ken Brinsden does not agree with those who say China's steel industry is at risk of being oversupplied due to new iron ore supply coming on from the major miners, he said in a Tuesday conference call.
"The market is in under-supply to China and all seaborne iron ore is doing is catching up to replace China's high cost domestic production," he said.
Atlas also noted that since the end of the Chinese New Year holiday, markets have been slower due to cold weather inhibiting construction cycles, which is not unexpected.
Atlas put its breakeven price for iron ore at around A$75/mt, but added the number is not definitive, due to freight, royalty and Australian dollar fluctuations.
Atlas produced a record 5.1 million mt of iron ore for the six months ending December 2013, up from 3.3 million mt in the same period a year earlier, the company said in its six-month report, also released Tuesday.
Average iron ore price per mt received CFR (including value fines) was $115.60 in the six months ending December, compared to $98.50/mt in the corresponding period a year earlier.
Atlas said Tuesday it remains on track to achieve its production guidance of 10.2 million-10.7 million mt for fiscal year 2014.
"We are now producing at over 10 million mt/year and heading towards 12 million mt/year, we have a significant resource base in the Pilbara and port entitlements giving us attractive options for value accretive growth," Brinsden said in a statement.
Atlas reported a net profit after tax of A$74 million for the six months ending December 2013, compared to a loss of A$256 million for the same period a year earlier.