With environmental approval already in place, the board go-ahead paves the way for development works at the project to start, with mining operations to kick off in the 2013 December quarter.
Mt Webber, located 230km via road south-southeast of Port Hedland, is a 70:30 joint venture between Atlas and coal producer Altura Mining.
The companies are targeting an initial production rate of 3 million tonnes per annum at Mt Webber, ramping up to 6Mtpa under stage 2 of the mine development.
First ore shipments are expected in the June quarter of next year and will continue for approximately 18 years, as per the mine’s initial mine life estimate.
Atlas managing director Ken Brinsden said Mt Webber would provide the company with high quality, long life production, enabling it to reach its 12Mt production target by the 2014 June quarter.
“With our Pardoo, Wodgina and Mount Dove mines in operation, Abydos due to commence in the current quarter and now Mt Webber being developed, Atlas will have delivered five mines in around five years,” Brinsden said.
“This positions the company to deliver strong cash flows, which will in turn underpin returns to shareholders and enable Atlas to consider further investment in its pipeline of quality growth projects.”
The development of the project will require a 200-strong construction workforce and operations workforce of 280.
The decision to bring Mt Webber online will enable Altura to join the ranks of the Pilbara iron ore producers via infrastructure sharing arrangements.
Agreements are in place to allow mining, transport and sale of Altura’s share of products via Atlas’ infrastructure.
Under the JV, Altura will receive 30% of annual production, equating to 900,000tpa of direct shipping ore product until its share of project reserve is exhausted.
Atlas will operate and manage the open pit operation, with Altura to sell its entire share of the ore mined from Mt Webber to Atlas, with pricing to be determined by Atlas’ average cargo ore sales on a monthly basis.
The project is fully funded by Atlas’ existing cash balance, which stood at $404 million at the end of the March quarter.
Altura will finance its share of the capital cost through a finance package provided by Atlas, with repayment of the loan derived from its share of ore sale proceeds from Mt Webber.
Mt Webber is expected to produce ore at a grade of 57.2% iron content, with the product to be trucked to Utah Point port.