Atlas Iron Claps Back at Fortescue Metals Group

- June 28th, 2018

Fortescue Metals Group recently called out the validity of Atlas Iron’s priority status at Port Hedland. Atlas has since come back with a response of its own.

After being publicly called out by shareholder Fortescue Metals Group (ASX:FMG) regarding priority rights at Port Hedland, Atlas Iron (ASX:AGO) has provided its own response, reiterating its lack of exclusivity at the Western Australian port.

In a media release put out Wednesday (June 27), Fortescue, which currently owns a 19.9-percent stake in Atlas, openly requested that the company provide more information about its position with North West Infrastructure (NWI).

NWI, in which Atlas has a key stake, is a joint venture that intends to develop two new berths at Port Hedland. However, NWI was told earlier this month by Western Australia’s transport minister that it doesn’t have priority access to the berths, as they have been reserved for junior miners.

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“At the time of that announcement, Atlas advised shareholders that it was considering its position with respect to this notice,” Fortescue’s statement reads.

“In common with other Atlas shareholders, Fortescue believes that further clarity is needed on the position of Atlas in relation to these assets and we continue to assess our strategic options regarding our shareholding in Atlas,” it continues.

On Thursday (June 28), Atlas responded to Fortescue with its own statement, acknowledging the bad news it received from Western Australian government, but reiterating that the project’s final ruling belongs with the Pilbara Ports Authority.

“The allocation of berth capacity remains the function of the Pilbara Ports Authority (PPA) as the responsible entity for the Port of Port Hedland, pursuant to the Port Authorities Act 1999,” Atlas’ response says.

“If there is a material change in the circumstances of NWI in the future, the Minister advised that NWI may make an application in accordance with PPA’s standard port development processes,” it adds.

The transport minister has declined to answer what constitutes a junior miner, and the end of Atlas’ statement hones in on the hope that there may be a compromise between NWI and the government.

“Atlas notes media comments attributed to the Western Australian Premier Mark McGowan indicate that the State Government has not ruled out a compromise on its ‘junior miner’ policy if an iron ore major emerges as an owner of Atlas,” says the company.

Fortescue is currently in a takeover battle with fellow major miner Hancock Prospecting for full ownership of Atlas. Hancock subsidiary Redstone recently put down a AU$390-million bid for the company, forcing Fortescue to weigh its options.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

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