BEIJING June 29 (Reuters) - China's Hebei Iron & Steel Group is in talks with Australia's Atlas Iron Ltd for a stake in its Ridley magnetite project, the China Daily newspaper reported on Tuesday, citing unnamed sources familiar with the matter.
It quoted one source as saying Hebei had earlier been in talks with Aurox Resources Ltd (AXO.AX: Quote) for a stake in the same project, but that no deal had materialised. Atlas (AGO.AX: Quote) said in March it planned to buy Aurox.
The newspaper did not say how big the stake might be. It said Ridley is expected to yield 15 million tonnes of iron ore annually over the next 35 years.
Unlike many of its rivals, Hebei Iron & Steel, which was China's top steel producer in 2009, does not yet have any overseas mining resources and is looking at Ridley to bolster its iron ore supplies, China Daily quoted the source as saying.
China accounted for almost half the world's steel production last year and is the world's top buyer of iron ore.
(Reporting by Tom Miles; Editing by Jonathan Hopfner)
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