nice if ago was $30, page-18

Article from yesterdays Australian
Bullish Atlas Iron tells bidders to back off
JESSIE RISEBOROUGH From: The Australian September 15, 2011 12:00AM

Atlas Iron chief executive David Flanagan says a number of likely buyers are kicking the company's tyres, but it's not for sale. Picture: Nirme Marie Source: The Australian
ATLAS Iron chief executive David Flanagan has rebuffed approaches from potential bidders because he foresees a tenfold gain in the value of the $2.8 billion Australian iron ore exporter.

"We've had a number of groups approach us with confidentiality agreements," he told a conference in London yesterday. "We just don't engage because we are not for sale."

Atlas announced last month its first fiscal full-year profit of $169 million after increasing production and exports from mines in Western Australia as prices for the steelmaking raw material rose. Fortescue Metals Group and Gindalbie Metals are among rival Australian iron ore suppliers to have garnered investments from Asian steelmakers to help fund expansion, an approach Mr Flanagan has so far resisted.

"If someone wants to have a crack at the business it's going to have to be a true unsolicited hostile crack, and it's going to need to be really robust," Mr Flanagan said. "We reckon we are a $30 stock."

Atlas shipped 4.6 million metric tons of iron ore to China in the 2011 fiscal year and has forecast six million tons of exports this year. The Perth-based company is seeking to boost production to an annual rate of 12 million tons by the end of the 2012 fiscal year.

Atlas has made about 50 acquisitions to build a portfolio of resources and port capacity to help meet a production target of 46 million tons a year by 2017, Mr Flanagan said.

In June, Atlas offered to buy FerrAus for $214m, trumping a bid by Wah Nam International Holdings, to combine assets in the Pilbara region of Western Australia.

It purchased a 19.9 per cent stake in Brazilian iron ore explorer Centaurus Metals in July for $18.7m.

"They're over there now busy consolidating," Mr Flanagan said of Centaurus. "We reckon that within two years they will be exporting and maybe one day we will rein them in."

Mr Flanagan plans to apply the Atlas strategy of consolidating resources in Australia's Pilbara to Brazil, the world's second-largest iron ore exporter.

"This same consolidation model will work in Brazil," he said. "There should be 10 or 15 $5bn companies in Brazil and there's not. Why not?"

Rio Tinto, BHP Billiton and Fortescue are Australia's three largest iron ore exporters. The country is the world's biggest shipper of the raw material.