atlas links with aurox on port

Atlas links with Aurox on port Sarah-Jane Tasker From: The Australian March 09, 2010 12:00AM Increase Text SizeDecrease Text SizePrintEmail Share
Add to DiggAdd to del.icio.usAdd to FacebookAdd to KwoffAdd to MyspaceAdd to NewsvineWhat are these?PILBARA iron ore miner Atlas Iron looks set to extend its infrastructure agreement in Port Hedland with junior Aurox Resources.
Atlas Iron placed its shares in a trading halt yesterday, pending a "potential material transaction", followed by Aurox Resources, which halted trading "pending a price-sensitive transaction".

The two companies announced a port co-operation agreement late last month on the Utah Point port facility being constructed by the Port Hedland Port Authority.

Atlas agreed to advance an interest-free loan of $13.86 million to Aurox so the junior could pay a charge to the Port Hedland authority, and in return Atlas would have first right to use any of Aurox's unused or surplus berth, ship loading and ore stockpiling capacity at the port.

Industry commentators had speculated that Atlas was set to make an announcement about the sale of a stake in its Ridley magnetite project, but its trading halt is likely to be related to the Aurox infrastructure deal, according to company insiders.

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A report out of India yesterday had suggested a consortium including NMDC, India's largest iron ore miner, had made a $US230m ($252m) bid for a 70 per cent stake in Atlas Iron's Ridley project.

The consortium was said to include Saudi Arabia's ABS Consulting and Australia's Boulder Steel.

Perth-based Atlas had already said it was fielding interest from Asian steel mills for a strategic stake in the asset, and earlier this year it said it expected the sale, on which it is being advised by Goldman Sachs JBWere, to be complete in the first half of this year.

Managing director David Flanagan said at the time the interest in the stake was coming from "big groups".

It was also speculated yesterday that a Chinese group could make a rival bid for the 70 per cent interest in the Pilbara asset.

The junior and mid-tier iron ore sector in Western Australia has been attracting increased interest from investors as talks on infrastructure and consolidation intensify.
If the below is true, Atlas has cost stock holders almost a full day of postive speculation on the Ridley deal. I'll wait and see, but certainly Atlas has a history of extraordinarily bad timing when it comes to positive announcements...or in this case, killing speculation of one. You do get tired of it...
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Australia's competition watchdog last week backed the North West Iron Ore Alliance's push to collectively bargain for rail access in the Pilbara region.

The alliance, which includes Atlas Iron, Brockman Resources and FerrAus, also announced yesterday that a pre-feasibility study on the group's proposed 50 million tonne a year port development would be capable of meeting the shipping needs of the iron ore companies.

The study also concluded that the port infrastructure and materials handling facilities, including the berths, could be operational during the second half of 2013.

The total capital cost estimate for the project was $2.1 billion, incorporating a two-phase development program.