May 17 (Reuters) - Australia's Atlas Iron said on Sunday the...

May 17 (Reuters) - Australia's Atlas Iron said on Sunday the chairman of rival miner Fortescue Metals Group will personally invest in capital-raising by Atlas, which has fended off a bankruptcy threat rooted in low iron-ore prices.
On Friday, Atlas announced it will raise capital as part of a rescue package supported by creditors and service contractors.
"Andrew Forrest was the first to put his hand up to invest in the capital raising," Atlas Chairman David Flanagan said on a call with reporters.
"We are not going to be a subsidiary of Andrew Forrest Inc, but the investment will be meaningful," Flanagan said.
Forrest's participation in the fund-raising would be through private entities he owns and not involve Fortescue, according to Flanagan and Fortescue Chief Financial Officer Stephen Pearce.
Flanagan said Atlas could seek to raise as much as $180 million, though the company did not require that much capital.
A tumbling iron ore price - down more than 50 percent in the past year - caused Atlas to announce a halt to production in April.
But an eleventh-hour deal with contractors to cut costs, meaning that its break-even price will now be equivalent to a Chinese spot price of around $50 a tonne, led to company to move to resume full production at a rate of around 14 million tonnes a year.
In a profit-sharing arrangement, the deal with trucking group McAleese Ltd and stevedores QUBE Ltd will give them a combined 25 percent share of the operating cash flow from two of Atlas's three mines.
Flanagan said he welcomed calls by Australian politicians for an inquiry into the nation's iron ore industry and oversupply.
Prime Minister Tony Abbott on Friday threw his support behind a proposed Senate inquiry into the economic impact of a slump in the price of iron ore, ratcheting up pressure on top producers Rio Tinto (Xetra: 855018 - news) and BHP Billiton (NYSE: BBL - news) .
RIO and BHP maintain lower production costs enable them to weather price cycles in the commodities markets
The iron ore price slump has caused a A$20 billion ($16 billion) loss in government revenue in the past year and the fiscal 2016 budget hinges on ore fetching at least $48 a tonne over the next year.
The iron ore price hit $46.70 a tonne in April, its lowest in a decade, although it picked up to around $61 this past week. (Editing by Richard Borsuk)