Atlas Iron is confident enough about iron ore demand to press on with production growth this year despite low prices contributing to a heavy full year loss.
Production is currently at eight million tonnes per annum, and on track to increase to 10 million tonnes per annum by the end of June 2013.
Managing director Ken Brinsden said he was not claiming to be able to compete with iron ore giants such as BHP Billiton, Rio Tinto or Fortescue on cost.
However, he believed Atlas Iron was far more competitive than domestic Chinese producers and Australian miners outside the big three.
He also said China's leadership transition would support strong growth and a strong iron ore price into the future.
"A lot of lot investment decisions will come to fruition as a result of political change," he told reporters in a teleconference.
"Our cost base puts us roughly mid-range in terms of cash costs delivered into China, the 50th percentile of 100 per cent of tonnes available to the Chinese market."
The Western Australia Pilbara iron ore miner posted a first half loss of $256 million, caused by writedowns in the value of several exploration areas.
The emerging Pilbara miner's result for the six months to December 31 was down from a $6.08 million profit in the previous corresponding period.
The loss includes $455 million in charges related to impairments on Atlas' undeveloped Horizon 1 and 2 project areas and other tenements.
Underlying profit in the six months to December of $1 million was down from $62.2 million in the previous corresponding period, as sales revenues dropped because of weaker iron ore prices.
Te company said the recent recovery in iron ore prices was generating improved margins, with a cash surplus of $32 million made in January.
Mr Brinsden said the results of a study into partnering with Brockman and Aurizon to build new rail and port infrastructure in the Pilbara were due soon, with its feasibility to be based on a longer-term view of the iron ore price.
Atlas shares were down 5.5 cents at $1.545 on Tuesday.