After more than 50 large-scale M&As in 7 years and after enjoying low-cost expansion, Australia’s fourth-largest iron ore producer Atlas Iron (AGO.AX) began to seek investors in the largest iron ore consumer market in China.
"Currently, our operating costs are FOB AUD 40-42 per tonne, bank cash is AUD 293 million, and we have a new cash flow of 30 million - 40 million AUD per month. We have no liabilities and the financial situation is quite good."
On April 27, Atlas chairman David Flanagan said in an exclusive interview with reporters: “We are now exporting 500,000 tons of hematite every month, but we also have first-class magnetite resources, hoping to look for magnetite and related infrastructure. Partners can achieve an annual output of 65 million tons after expansion.â€
He referred to the world-class magnetite project, including the Ridley Project. The project is only 75 kilometers away from Hederland Port, the world’s largest exporter of iron ore, and has a prospect of 4 billion tons of reserves. The product grade after the beneficiation is 68%. Since 2014, the mine can produce 20 million tons of high-quality magnetite concentrate annually, with a production period of up to 30 years. The Atlas's overall potential magnetite resources amount to 5 to 6 billion tons.
David Flanagan said that due to the superior location of the Reedley project, "there are many high-quality potential partners interested in it."
However, he refused to further disclose the name of the Chinese company he intended to represent. He only stated that "for all types of enterprises, including steel enterprises, transportation, infrastructure, ports, and other aspects of customers are all in the negotiation."
Atlas, which was established in December 2004, has the right to use 26,000 square kilometers of land in the Pilbara region, ranking second. It has been proved that DOS direct-transport iron ore reserves are 650 million tons, and it is expected to further increase to 1 billion tons.
Atlas currently produces 6 million tons of iron ore each year, all through Port Hedland, all sold to China. By the end of next year, it is expected that the output will increase to 12 million tons, and in 2015 it will increase to 15 million tons.
David Flanagan also told reporters that Atlas has a strategic advantage in the selectivity of port operations compared to its potential competitors.
The day before, Baosteel Chairman Xu Lejiang judged at the "China-Australia Economic and Trade Cooperation Forum" that due to the expansion of mine production in recent years, a large number of steel or non-steel companies have invested in the upstream, and it is expected that the iron ore market supply and demand will soon After the reversal.
In response, David Flanagan first said: “Xu Lejiang is very insightful. We listened very carefully to his views.†But he still insists that many mining projects will be postponed due to the insufficiency of supportive infrastructure and labor resources. The supply and demand inflection point may even be postponed.
“Until an unknown future, we will continue to choose to continue to develop low-cost, high-quality mines. In the long term, the iron ore market still has great support to maintain the CIF price of 100 US dollars / ton. "He said.
As one of the key players in promoting mining tax avoidance in Australia together with BHP Billiton and FMG, David Flanagan understands that Chinese buyers will be worried about further pressure on the mining industry after the mining tax is imposed.
He told reporters: “At present, we need to pay business tax, stamp duty, licensing fees, etc. At least 37% of profits are used to pay taxes, and after the implementation of the mining tax, this proportion may increase to 45%. At present, we are still very active. Communicate with government stakeholders to minimize the negative impact of tax increases."
“At present, the proportion of profits paid by large-scale miners is less than 40%, which is lower than that of small- and medium-sized miners. Therefore, in the future development process, the obstacles for the development of new mining enterprises will become larger, and existing companies will occupy more obvious. Absolute advantage," he said.
"Currently, our operating costs are FOB AUD 40-42 per tonne, bank cash is AUD 293 million, and we have a new cash flow of 30 million - 40 million AUD per month. We have no liabilities and the financial situation is quite good."
On April 27, Atlas chairman David Flanagan said in an exclusive interview with reporters: “We are now exporting 500,000 tons of hematite every month, but we also have first-class magnetite resources, hoping to look for magnetite and related infrastructure. Partners can achieve an annual output of 65 million tons after expansion.â€
He referred to the world-class magnetite project, including the Ridley Project. The project is only 75 kilometers away from Hederland Port, the world’s largest exporter of iron ore, and has a prospect of 4 billion tons of reserves. The product grade after the beneficiation is 68%. Since 2014, the mine can produce 20 million tons of high-quality magnetite concentrate annually, with a production period of up to 30 years. The Atlas's overall potential magnetite resources amount to 5 to 6 billion tons.
David Flanagan said that due to the superior location of the Reedley project, "there are many high-quality potential partners interested in it."
However, he refused to further disclose the name of the Chinese company he intended to represent. He only stated that "for all types of enterprises, including steel enterprises, transportation, infrastructure, ports, and other aspects of customers are all in the negotiation."
Atlas, which was established in December 2004, has the right to use 26,000 square kilometers of land in the Pilbara region, ranking second. It has been proved that DOS direct-transport iron ore reserves are 650 million tons, and it is expected to further increase to 1 billion tons.
Atlas currently produces 6 million tons of iron ore each year, all through Port Hedland, all sold to China. By the end of next year, it is expected that the output will increase to 12 million tons, and in 2015 it will increase to 15 million tons.
David Flanagan also told reporters that Atlas has a strategic advantage in the selectivity of port operations compared to its potential competitors.
The day before, Baosteel Chairman Xu Lejiang judged at the "China-Australia Economic and Trade Cooperation Forum" that due to the expansion of mine production in recent years, a large number of steel or non-steel companies have invested in the upstream, and it is expected that the iron ore market supply and demand will soon After the reversal.
In response, David Flanagan first said: “Xu Lejiang is very insightful. We listened very carefully to his views.†But he still insists that many mining projects will be postponed due to the insufficiency of supportive infrastructure and labor resources. The supply and demand inflection point may even be postponed.
“Until an unknown future, we will continue to choose to continue to develop low-cost, high-quality mines. In the long term, the iron ore market still has great support to maintain the CIF price of 100 US dollars / ton. "He said.
As one of the key players in promoting mining tax avoidance in Australia together with BHP Billiton and FMG, David Flanagan understands that Chinese buyers will be worried about further pressure on the mining industry after the mining tax is imposed.
He told reporters: “At present, we need to pay business tax, stamp duty, licensing fees, etc. At least 37% of profits are used to pay taxes, and after the implementation of the mining tax, this proportion may increase to 45%. At present, we are still very active. Communicate with government stakeholders to minimize the negative impact of tax increases."
“At present, the proportion of profits paid by large-scale miners is less than 40%, which is lower than that of small- and medium-sized miners. Therefore, in the future development process, the obstacles for the development of new mining enterprises will become larger, and existing companies will occupy more obvious. Absolute advantage," he said.
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