News: AGO UPDATE 1-Australia's Hancock Prospecting discloses nearly 20 pct stake in Atlas Iron

(Adds detail on stake, background)

June 13 (Reuters) - Australian billionaire Gina Rinehart's Hancock Prospecting Pty Ltd group of companies disclosed on Wednesday a 19.96 percent stake in Atlas Iron Ltd (AGO) , heating up the race for the small iron ore miner.

Hancock Prospecting Pty Ltd holds a 14.97 percent stake in Atlas, while Hancock's unit Redstone Corporation Pty Ltd will have a 4.99 percent interest in the Perth-based miner.

The move comes a week after Fortescue Metals Group (FMG) said it has built a 19.9-percent interest in Atlas Iron, giving it a large enough stake to block a A$280 million ($212.07 million) takeover of Atlas by Mineral Resources Ltd (MIN) .

Australian mining infrastructure group Mineral Resources (MIN) responded to Fortescue, by allowing Atlas to hold talks with other potential buyers.

In April, Mineral Resources agreed to buy Atlas via a scheme of arrangement, saying at the time that the amalgamation of its existing iron ore assets in the Pilbara region with those of Atlas would lead to cost savings.

Atlas is a hot target for takeover by Fortescue due to its North West Infrastructure (NWI), which the firm's joint venture with Brockman Mining 0159.HK and FerrAus has a capacity to export 50 mln tonnes per annum (Mtpa) from Port Hedland, UBS said in a statement last week. ($1 = 1.3203 Australian dollars)