It is a burning question in the market, particularly after Atlas Iron suspended trade in its shares and announced a strategic review after getting close to breaching terms of its $US250 million loan.

Atlas raised that money in US bond and loan markets on the back of Fortescue’s success in raising $US2.05 billion in bonds in 2010 while there was plenty of easy money in the US.

Now those floodgates have closed — as Fortescue found when it tried to refinance its debts recently — and the US bonds issued by Australian miners are trading at substantial discounts to their face value as investors grow concerned about their ability to repay debt.

Certainly, Fortescue has many more options than Atlas, including the ability to cut production, sell assets like mines or freight infrastructure or take on new equity partners.

Chinese steel mills will also be keen to keep Fortescue going as a larger-scale alternative to the big players Rio Tinto, BHP Billiton and Vale, although the Chinese move last week to reduce taxes on Chinese-produced iron ore was another blow to hopes of an iron ore price recovery.

It is not just Atlas and Fortescue that are feeling the cash-flow pain as the iron ore price falls below the cost of production for many of the smaller producers.

Arrium, BC Iron, Grange and Mount Gibson are also on the list, although at least Arrium can concentrate more on its steel-production business, and the other three have some balance sheet protection to weather the downturn — depending, of course, on the duration of the price fall below US$50 a tonne.

Investors will be looking for some guidance from Fortescue this Thursday when it unveils its March quarter production report.

Rio Tinto’s shareholder meeting in London on Thursday night will also be closely watched for any hints about the future for iron ore, given that chief executive Sam Walsh is one of the world’s most experienced iron ore experts.

It is a burning question in the market, particularly after Atlas Iron suspended trade in its shares and announced a strategic review after getting close to breaching terms of its $US250 million loan.

Atlas raised that money in US bond and loan markets on the back of Fortescue’s success in raising $US2.05 billion in bonds in 2010 while there was plenty of easy money flowing through the US.

Now those floodgates have closed — as Fortescue found when it tried to refinance its debts recently — and the US bonds issued by Australian miners are trading at substantial discounts to their face value as investors grow concerned about their ability to repay debt.

Certainly Fortescue has many more options than Atlas, including the ability to cut production, sell assets like mines or freight infrastructure or take on new equity partners.

Chinese steel mills will also be keen to keep Fortescue going as a larger scale alternative to the big players Rio Tinto, BHP Billiton and Vale, although the Chinese move last week to reduce taxes on Chinese produced iron ore was another blow to hopes of an iron ore price recovery.

It is not just Atlas and Fortescue that are feeling the cash flow pain as the iron ore price falls below the cost of production for many of the smaller producers.

Arrium, BC Iron, Grange and Mount Gibson are also on the list, although at least Arrium can concentrate more on its steel production business and the other three have some balance sheet protection to weather the downturn — depending, of course, on the duration of the price fall below US$50 a tonne.

Investors will be looking for some guidance from Fortescue this Thursday when it unveils its latest production report for the March quarter.

Rio Tinto’s shareholder meeting in London on Thursday night will also be closely watched for any hints about the future for iron ore, given that chief executive Sam Walsh is one of the world’s most experienced iron ore experts.

Other than iron ore, other production reports to watch out for include Whitehaven Coal, Iluka and Santos while a shareholder meeting for Woodside Petroleum and a speech by ANZ chief executive Mike Smith will be worth monitoring.