No priority: Atlas future murky after WA government move

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 5 years ago

No priority: Atlas future murky after WA government move

By Darren Gray

The future of struggling junior miner Atlas Iron has become even more unclear after it was advised by the West Australian government that it does not have a "priority right" to develop valuable export infrastructure at Port Hedland.

Shares in the miner, which have jumped more than 60 per cent in recent days after attracting the interest of mining billionaires Andrew "Twiggy" Forrest and Gina Rinehart, fell sharply on the news and eventually closed down 18.2 per cent  at 3.6 cents. A massive number of Atlas shares, nearly 880 million, changed hands on Thursday.

The WA government also advised Atlas, an iron ore miner with operations in the Northern Pilbara region, that two proposed new port berths at Port Hedland associated with an Atlas joint-venture project known as North West Infrastructure (NWI), now stalled, would be set aside for junior miners.

While Atlas didn't release a WA government definition of "junior miner", nobody in WA mining circles has been arguing that the description could apply to either Fortescue Metals Group, or Hancock Prospecting, meaning the ruling could have ramifications for the two companies if they have hopes of acquiring extra port capacity via this future project.

Atlas emerged from a trading halt on Thursday and told the market it had received correspondence from the office of WA Transport Minister Rita Saffioti that implied it didn't have a "priority right" to develop two berths at the port of Port Hedland.

Ms Saffioti advised Atlas the Pilbara Ports Authority would assess any application by the NWI joint venture to develop Stanley Point berths 3 and 4 on its merits in line with standard port development processes.

Loading

Atlas said it considered the letter from Ms Saffioti "contrary to the previous stated position of the Western Australian government". It said it was now considering its position.

The battle for Atlas came up in question time in the WA state parliament on Thursday, with opposition mines and petroleum spokesman Bill Marmion quizzing Ms Saffioti about what exactly was a junior miner.

"What's the definition of a junior miner? Is Mineral Resources a junior miner, (is) FMG a junior miner, Hancock Prospecting?" Mr Marmion asked.

Advertisement

To which Ms Saffioti responded: "I'm not going to add to further speculation and further activity out there in the stockmarket."

Ms Saffioti also said NWI did not have exclusive rights to develop the two berths at Stanley Point, adding that this position was no different to that of the previous WA government.

Ms Saffioti said NWI was asked over many years "to prove up the proposal, that didn't happen".

She also said: "Nothing moved and as a result that exclusivity has been taken away."

According to some mining industry observers, the potential extra port capacity at Port Hedland via the Atlas joint venture project is a key reason for Mr Forrest and Mrs Rinehart's interest in Atlas.

Mr Forrest's Fortescue Metals Group last week bought a 19.9 per cent stake and days later Mrs Rinehart's Hancock Prospecting said it had acquired a 19.96 per cent "aggregate beneficial and economic interest" in the company. Both mining magnates have stopped just short of hitting the 20 per cent threshold that would compel them to make a bid for all of Atlas' shares.

Most Viewed in Business

Loading