Atlas pays inaugural dividend
Article by Mark Beyer courtesy of Business News.
Hancock Prospecting subsidiary Atlas Iron has paid a maiden dividend of $225 million despite posting a big fall in annual net profit from its iron ore mining operations.
Production from the company’s Mt Webber, Sanjiv Ridge and newly commissioned Miralga mines increased fractionally to 9.8 million tonnes for the year to June 2022.
Lower iron ore prices and higher freight costs suppressed margins, resulting in operational cash flow falling to $591 million, from $1,022 million in FY21.
Earnings after tax fell sharply to $302 million, from $938 million in the prior year.
A notable milestone for the year was delivery of the Miralga mine on budget and ahead of schedule.
Miralga is an extension of the completed Abydos mine, and is located on Nyamal land 100km from Port Hedland.
A joint venture between Nyamal traditional owner business East West Pilbara and Forrestdale-based Ozland provided civil and construction works as well as being involved in ongoing operations.
Atlas Iron is looking to invest more than $700 million in growth projects.
Its board has approved $605 million of spending to develop the McPhee Creek project, expected to commission mid-2023.
McPhee Creek will have expected annual production of 9.6mtpa, with the ore to be hauled 100km by road to the Roy Hill mine.
From there it will be hauled by rail to Port Hedland.
Atlas Iron also plans to spend $46 million on a feasibility study for the development of stage 1 of the Ridley magnetite project and $60 million to upgrade a stock yard at Port Hedland’s Utah Point to secure long term access.
In addition, Atlas was appointed manager of the Mount Bevan joint venture on behalf of Hancock Magnetite Pty Ltd and commenced a pre-feasibility program on its behalf.
Chief executive Sanjiv Manchanda said that following a record-breaking profit in the previous financial year, the company was focused on cost control, improving efficiencies and positioning Atlas for the future.
“Announcing the first dividend and providing significant funding for growth projects highlights the strength of our company and its valued employees,” he said.
The company noted payment of state royalties to the tune of $81 million and port charges to the Port Hedland Port Authority of $47 million.
Hancock Prospecting chair Gina Rinehart said Atlas continued to contribute strongly to the Hancock Group.
Hancock‘s iron ore assets include a 50 per cent stake in the Hope Downs joint venture with Rio Tinto, a 70 per cent stake in Roy Hill Holdings and 100 per cent of Atlas Iron.