Atlas Iron has rejected rival Fortescue Metals' complaints about a Western Australian government plan to compensate smaller miners for low iron ore prices.
Fortescue Metals chief executive Nev Power this week criticised the plan to give smaller miners a 50 per cent royalty rebate while prices were under $US90 a tonne, saying it would create a handout mentality.
However Atlas chief executive Ken Brinsden said it was good policy to help the junior and mid-tier miner scene restructure and survive.
Those miners monetised iron ore assets that the majors did not bother developing, creating jobs and royalties that benefited everyone, he said.
Atlas had paid $250 million in state royalties since it started mining, Mr Brinsden said.
"The mid-tier and junior scene affords businesses and employees the opportunity to work for businesses at all scales in iron ore: small, medium and large," he said.
"The royalties we pay support the government of WA to continue to pay for police stations, hospitals, schools and nurses, you name it."
Atlas revealed on Tuesday that it sold its iron ore at a loss during the December quarter.
All-in costs fell four per cent to $66 a tonne but its average sale price fell 12 per cent to $63 a tonne.
Shipments lifted by 23 per cent to 3.8 million tonnes during the three months to December 31 and Atlas expects to sell 12.9-13.5 million tonnes in 2014/15.
The company was not currently unprofitable and could survive at current prices, with freight costs falling since December, taking another $US4 a tonne out of costs, Mr Brinsden said.
Atlas was well progressed in a program to cut $75 million-$95 million in operating costs by 2017, enabling it to be profitable at a lower iron ore price, he said.
Australia's junior iron ore miners have been struggling since the price plunged to under $US70 a tonne, with Atlas, BC Iron and Mt Gibson cutting hundreds of workers in recent weeks.
However Mr Brinsden said it would not take much to make Atlas highly profitable again and he was confident in China's ongoing economic demand.
China announced on Tuesday that its economy grew by 7.4 per cent in 2014, a 24-year low.
He said 100 million tonnes worth of annual iron ore production was "uneconomic" and many of those miners would eventually disappear, while a lower oil price and lower Australian dollar should help reduce diesel and other costs.
Atlas Shares fell one cent to 18 cents on Tuesday and are down 82 per cent from 98 cents a year ago.
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