Junior miner Atlas Iron will continue to aggressively cut costs after iron ore price falls forced it into the red with a $1 billion loss.
Managing director Ken Brinsden says Atlas made significant cost cuts in the first six months of the 2014/15 financial year to deal with challenging market conditions.
Further reductions are expected in the current half.
“For us, it’s all about where we’ve got to with respect to the cost base,” Mr Brinsden said on Tuesday.
“I’m still confident that there’s more cost savings to come out of the business.”
Atlas made a net loss of $1.09 billion for the six months to December 31, compared to a profit of $73.7 million a year earlier.
The result included about $834 million in impairments on Atlas’s Pilbara assets that were flagged in December.
Excluding one-off items including the impairments, Atlas made an underlying loss of $139 million, compared to a profit of $61.15 million.
Atlas is forecasting its cost of landing a tonne of iron ore in China to fall to between $60 and $63 in the six months to June 30, 2015 – down from $67.29 in the first half of the financial year.
Atlas aims to be at the lower end of the revised range by June 2015.
Mr Brinsden said that in January, Atlas landed iron ore in China at $60.80 per tonne.
Mr Brinsden said the first half had been really tough, characterised by a “massive” reduction in the iron ore price.
But he said Atlas had had a “cracking” first half from a production point of view, with 6.89 million tonnes shipped – well above initial guidance for 2014/15.
On the outlook for the iron ore price, Mr Brinsden said Atlas believed that over time, the price will probably be higher than it is today.
Shares in Atlas were flat at 20.5 cents at 1425 AEDT.
ATLAS CUTS COSTS TO COUNTER LOW IRON ORE PRICE
* First half net loss of $1.09b, down from a net profit of $73.7m in 2013/14
* Revenue of $450.8m, down 23.4pct, from $588.2m
* No interim dividend