The embattled owner of the Windimurra vanadium project has described damage to its beneficiation plant from a fire last week as "extensive" and says further studies are required to determine whether it can be salvaged.
Shares in Atlantic have been suspended since the fire on Tuesday, February 4, as the company sought to determine the extent of damage to the plant, east of Mt Magnet.
"While the formal fire investigation is not yet complete, it is believed that the fire started in the screen 3 under-pan when a piece of hot metal settled on combustible material that then ignited and spread through the high density polyethylene piping in the beneficiation plant," Atlantic said in a statement today.
"The damage to the beneficiation plant is extensive.
"Engineering teams are now being assembled to fully assess the damage and develop detailed rectification plans.
"Production of ferrovanadium has been suspended while this assessment is carried out and plans are formulated to take the business forward."
Atlantic said it had also stood down contractors involved in mining and ferrovanadium production activities.
It said its iron ore business was not affected.
Atlantic said it held comprehensive insurance for the damage and business interruption and was working with assessors to manage its claim.
"On this basis, the company has requested that the voluntary suspension remain in place until it is in a position to provide a more detailed update on the business and financial position," Atlantic said in a statement.
The fire is the latest blow in Atlantic's efforts to ramp-up production at the troubled Windimurra plant.
The company has been repeatedly forced to tap its biggest shareholder and creditor, Anthoni Salim's Droxford International, for extra funding over the past year because of cost blowouts and production problems at the plant.
Owing $US335 million to bondholders and tens of millions to Droxford, Atlantic has struggled to make the crushing, milling and beneficiation circuit work, pushing back production deadlines and spending at least $20 million on re-engineering and repairs.
The plant was about 85 per cent complete when Atlantic took control in 2010.
The plant was built by Mineral Resources under a build, own and operate contract with the project's previous owners.
Atlantic has accused MinRes of a breach of contract, which the contractor denies.
Atlantic shares last changed hands for 17.5 cents.