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Long-suffering iron ore miner Atlas heads for the black
[SYDNEY] Australian miner Atlas Iron ,near-bankrupt a year ago, on Thursday said it expects to become net-cash positive by mid-2017 thanks to higher iron ore prices.
Atlas, which mainly sells its ore to Chinese steel mills, finished the fiscal quarter ending on Dec. 31 with A$134 million (S$140 million) in the bank, up from A$95 million the previous quarter.
Atlas Interim Managing Director Daniel Harris said Atlas had staged a remarkable financial turnaround since undertaking a major restructuring last year. "Atlas is now on track to be in a net-cash position by the middle of this year," he said in a statement emailed to Reuters.
Atlas narrowly averted collapse last April after shareholders approved a debt-for-equity swap that handed 70 per cent of the company to creditors.
Since then, iron ore prices have more doubled to around US$80 a tonne, while Atlas has entered into forward price hedges and cut costs below selling prices.
The company mines about 14 million tonnes of iron ore a year in the Pilbara region of Western Australia, where it is dwarfed by rivals Fortescue Metals, BHP Billiton and Rio Tinto , who control the majority of Australia's 700-million-tonnes-a-year export market.
Mr Harris said the turn in company's fortunes put it in better shape to proceed with expansion work costing between A$47 million and A$53 million later this year.