go you good thing

By David Fickling
Of DOW JONES NEWSWIRES

KALGOORLIE, Australia (Dow Jones)--Australia's Atlas Iron Ore (AGO.AU) will
consider offers from three Asian companies for prospects holding about 3 million tons of
lower-grade iron ore that is in high demand amid a construction boom in China, Managing
Director David Flanagan said Monday.
"As long as we don't get a new tax of a change in some sort of foreign
investment risk in the next six months I think there's good a chance that we do a
deal," said Flanagan in an interview with Dow Jones Newswires on the sidelines of
the Diggers & Dealers mining conference in Kalgoorlie, Western Australia. Flanagan
said that Atlas has received offers from around 50 million Australian dollars (US$55
million) to A$400 million on individual deposits.
The company had held talks with companies from India, Japan and China over its Ridley
and Balla Balla magnetite deposits in the Pilbara and a third project, Yerecoin near
Perth. Atlas plans to become one of the largest iron ore producers in Australia's
Pilbara region by the end of 2012, when output is set to hit 12 million tons per year,
rising to 16 million tons a year in 2016.
But such developments are expensive at a time when Australia's major iron ore
producers are planning a near-doubling in capacity, increasing the importance of raising
cash from selling off non-core assets.
Flanagan said that the first stage of increased production should sharply increase the
company's cash flow, but the challenge would be to get rail access to reach its
deposits in the southeast Pilbara, where the company is in the process of acquiring the
neighbouring tenements of Ferraus Ltd. (FRS.AU)
"We're not necessarily going to build another railway line," he said.
"We are looking at building our own railway line, but we're looking at having
an independent party come and we'll also look at other parties who own railway
lines."
Rail access for smaller producers is a major issue in the Pilbara, where major miners
Rio Tinto PLC (RIO), BHP Billiton Ltd. (BHP), and Fortescue Metals Group Ltd. (FMG.AU)
operate their own lines with only Fortescue's open to another user, BC Iron Ltd.
(BCI.AU).
Flanagan said he could not comment on talks over joint use of one of BHP's rail
line, which were abandoned last month, due to confidentiality agreements. He said that he
had held talks with major infrastructure companies, including Asciano Ltd. (AIO.AU) and
QR National Ltd. (QRN.AU).
The Pilbara produces around 40% of the world's seaborne trade in iron ore, with
around 430 million tons shipped each year by the region's three main companies.
He said the acquisitive company, which alongside Ferraus has taken over Giralia
Resources NL and taken a 20% stake in Centaurus Metals Ltd. (CTM.AU) over the past year,
was not interested in Brockman Resources Ltd. (BRM.AU).
Hong Kong's Wah Nam International Holdings Ltd. made a joint bid for Brockman and
Ferraus late last year, but Flanagan said that Brockman's tenements were too hard to
combine with Atlas' and Ferraus' holdings.