Atlas Iron said it would double production at its Mt Webber mine in north Pilbara, Australia, to six million tonnes per annum (Mtpa) by the end of the December 2014 quarter, as its board has approved development of the project’s second stage.

Construction of the mine’s first stage started late in 2013 and exports of first ore are on track to commence in the June 2014 quarter.

Life-of-mine operating costs are anticipated to be about A$49 to A$51 per metric tonne, compared with the A$56 per metric tonne that was originally estimated for the first stage.

"The project is expected to generate pre-tax cashflow of more than $45 million a year."

Atlas Iron managing director Ken Brinsden said Mt Webber is a highly capital-efficient mine, with the completed feasibility study determining a combined cost of stages one and two being $212m for 6Mtpa, representing about $35 per annualised tonne of production.

"This capital cost is inclusive of a substantial contribution towards regional road upgrades, which will benefit Pilbara road users for years to come," Brinsden said.

Altura Mining will receive 30% of the annual production, equating to 900,000t a year of direct shipping ore from the start of operations during the June 2014 quarter.

Altura said that, based on current iron ore prices and Australia to US dollar exchange rates, the project is expected to generate pre-tax cashflow of more than $45 million a year.

The Mt Webber project spans the mining tenements M45/1209, which are 70%-owned by Atlas and 30%-owned by Altura, and the northern adjoining tenements M45/1197, which are 100% Altas owned.

The project will initially use conventional truck haulage, targeting first haulage in the second quarter of this year, and mine production may also comprise part of any future rail agreement.