Atlas Iron is raising $180 million from new and existing shareholders to protect itself against the fluctuating price of iron ore.

The raising will be at 5 cents per share, a 58% discount to last price recorded before a trading halt.

Atlas had planned to mothball its mines but managed to cut costs, with the help of its suppliers, and keep producing after an improvement in the price of iron ore.

“With production resumed and this new lower cost structure in place, Atlas is now focused on strengthening its balance sheet through the capital raising,” Cheryl Edwardes told the company’s annual general meeting during her first address as chair.

“We realise shareholders have already taken some pain with the fall in the share price and that the raising is by its nature dilutionary.”

However, she believes that the raising is an integral part of the strategy to insulate Atlas against future iron ore price volatility.