Junior miner Atlas Iron will progressively suspend production at its Pilbara mine sites, citing low iron ore prices.

The decision jeopardises the jobs of almost 600 workers, and has prompted Premier Colin Barnett to launch a scathing attack on the bigger iron ore companies, blaming them for flooding the market.

"I'm not about to interfere in the iron ore industry, but I want the companies to understand I am not some dopy Premier who's going to sit back and watch our natural resources fall below their true value," he told 720 ABC Perth.

Atlas went into a voluntary trading halt on Tuesday to launch a wide-ranging review of its operations.

Mine sites, exports to shut down within weeks

In a statement to the stock exchange, Atlas said it would wind down production at its mine sites over the month of April, with exports ending shortly after.

All of Atlas's projects will be put on care and maintenance until market conditions improve.

"Despite an extensive cost-cutting program, to which staff and contractors have made significant contributions, the global supply-demand imbalance for iron ore has driven prices down to the point where it is no longer viable for Atlas to continue production," the company said in the statement.

Atlas said despite achieving significant cost reductions, its "breakeven price remains well above the current spot price".

The company was hit by the battle for market share between the world's big iron ore miners that caused the price of the steel-making ingredient to fall below $US50 a tonne.

Smaller, higher-cost producers like Atlas Iron and BC Iron need an iron ore price above $US70 a tonne to make, what is considered, a decent profit margin.

The Mt Webber project will cease operations next week, followed by the Abydos project and then the Wodgina mine.

"To suspend our operations, with the impact that will have on so many committed and talented people, is an extremely difficult decision," managing director Ken Brinsden said in the statement.

"I sincerely thank all those who have worked so hard to build Atlas's production base and those who have worked furiously to maintain Atlas's competitive position over the past 15 months, in the face of increasingly oppressive market conditions."

Premier issues veiled threat

Mr Barnett said Atlas's suspension of operations was "of immense concern", and issued a veiled threat to BHP Billiton, Rio Tinto and Fortescue Metals.

"I cannot understand the business strategy of the three big major iron ore producers of flooding the market when the market is weak," he said.

"That is just a flawed strategy and not only has it hurt a company like Atlas Iron - dramatically - I think the companies are hurting their own shareholders and indeed the market.

"The State Government owns the iron ore and we are not willing to simply allow the iron ore continue to be sold at throwaway prices - and that's a pretty clear message to the iron ore industry.

"Don't forget who owns the iron ore, who controls the projects, who controls the ports, who controls tonnages and the like."

Atlas said it expected iron ore prices would eventually increase.

"However, the timing of a recovery is unclear, leaving Atlas with little choice but to take decisive action to protect its balance sheet and resource position," it said.

Credit agency Standard and Poor's recently downgraded the company's debt from B- to CCC, the third notch below investment grade, a "junk" rating applied to the debt of companies that are vulnerable and dependent upon favourable conditions to meet their commitments.

The ratings agency said at the time it believed Atlas had sufficient cash reserves to meet interest payments due in June 2015, but warned that it could "quickly deplete" its cash holdings within the next year if it could not arrest its negative earnings trend through further cost cutting and/or a higher iron ore price.

Atlas Iron's shares have fallen by nearly 90 per cent over the past year to $0.12.

Atlas collapse inevitable: commentator

Commentator Tim Treadgold said the collapse of Atlas was inevitable, given the low price.

"It was doomed from the day it started," he said.

"You cannot road train material to Hedland, you cannot road haul a low value, bulk commodity, which for a few remarkable years was a high value commodity.

"But everybody knew it would go in a cycle, it was night follows day stuff."

Atlas Iron was considered a market darling when it first entered the iron ore market in 2005, getting in just before the boom took off.

"They were because they got the timing right, they got in at the start of the boom," Mr Treadgold said.

"Where they all made a mistake, and they weren't alone, was assuming the boom would last forever.

"The state treasury of Western Australia, even as recently as last year had an iron ore price in its books of $US115 or $US120 a tonne - it was absolute nonsense."