Mid-tier iron ore miner Atlas Iron Ltd is eyeing an offshore asset and says it could branch into manganese.
Managing director David Flanagan said Atlas had considered moving into several commodities but its first step beyond iron ore would be manganese, which was used in steel making.
"In the Pilbara, manganese would fit very neatly with our business," Mr Flanagan told reporters at the Diggers and Dealers mining conference in Kalgoorlie, Western Australia on Wednesday.
"If you could ship a higher-value product through fixed infrastructure, that would be optimising the value of your throughput through that infrastructure.
"Why export a $US100-a-tonne product when you can export a $US300-a-tonne product?
"And we're using the same mining technology - it's just basically very similar," he said.
The company already has exposure to manganese through Shaw River Resources Ltd, which is 46 per cent held by Atlas.
"We're not about to bid for Shaw but that's why we're backing those guys in the Pilbara and in Ghana, and wherever else they go," Mr Flanagan said.
"They have got some fantastic prospects and a lot of good ground around (Consolidated Minerals') Woodie Woodie (manganese mine) and through the Ashburton (region in WA)."
Mr Flanagan said the offshore asset Atlas was eyeing "might fit nicely".
"But seriously, the main focus is the Pilbara iron ore, and for the next six months it's about growing production."
"In the last six years we've done 39 acquisitions," Mr Flanagan told the conference in Western Australia, referring to the company's massive build-up of prospective ground in the Pilbara iron belt.
"I think it's safe to say we're going to be doing more. If something comes along which represents a real win-win opportunity...we will jump (at it)."
Atlas said in March it planned to buy fellow Australian miner Aurox Ltd in an $143 million scrip offer to secure additional port capacity as it boosts output to meet Chinese demand.
Atlas plans to export 3 million tonnes of ore to Chinese steel mills in 2010, rising to 12 million tonnes by 2012.
The figure compares with much bigger production rates of Australia's top three iron ore producers Rio Tinto, BHP Billiton and Fortescue Metals Group which next year expect to produce a total of 400 million tonnes.
"At our Pilbara tenements, we've got resources of 160, 170 million tonnes. We think that that can grow (and) it could be another 80-90 million tonnes in that part of the world."
Mr Flanagan said Atlas was on track to quadruple its annual iron ore production rate to six million by December.
AGO Price at posting:
$2.06 Sentiment: LT Buy Disclosure: Held
