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Tuesday 20

November, 2018 1:01 AM



Atlas shares sink on WA govt port warning

Atlas shares sink on WA govt port warning

Atlas Iron says the Western Australian government has changed its policy related to the miner's right to develop valuable export infrastructure.

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By AAP 14.06.2018 02:44 PM

Atlas Iron shares have taken a battering after the Western Australian government indicated potential buyers of the junior miner may not be able to develop valuable export infrastructure.

Shares in Atlas, which gained as much as 64 per cent in the past week after companies controlled by Gina Rinehart and Andrew Forrest took large stakes in response to a takeover bid by ASX-listed Mineral Resources, fell steeply on Thursday coming out of a brief trading halt.

They were down 16 per cent at 3.75 cents at 1430 AEST.

Atlas said it had been notified by the WA government that the joint venture holding the company's rights to undeveloped port capacity in Port Hedland does not have a priority right to carry out the development, and any application would be judged on merit as the berths are set aside for junior miners.

Atlas said it considers that position as a change of policy by the WA government.

It could prove troublesome to potential Atlas buyers, including Ms Rinehart's Hancock Prospecting and Mr Forrest's Fortescue Minerals Group - each of which hold a near 20 per cent stake.

"Atlas considers that this position is contrary to the previous stated policy of the Western Australian government and is considering its position with respect to this notice," Atlas said in a statement.

Atlas operates two iron ore mines in the Pilbara and owns two undeveloped projects, along with its interest in the construction of a port facility capable of handling 50 million tonnes of exports each year.

Announcing it had increased its holding in Altas, Fortescue last week said it did not intend to support the $280 million all-scrip takeover offer by mid-tier player Mineral Resources, prompting talk that it was simply a blocking stake.

The Atlas board has supported the Mineral Resources offer and a vote on the deal is expected in July.

UBS analysts suggested last week that the port development rights may have been the focus of Fortescue's interest, but none of the companies involved have commented on the drivers of any deal.

Hartleys head of research Trent Barnett said the exact motives of all parties were difficult to discern.

"We know Atlas well and we know what they have; it's just hard to know what people want," Mr Barnett said.

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