AGO 0.00% 4.5¢ atlas iron limited

smh article: atlas harbours strategic appeal

  1. 3,394 Posts.
    lightbulb Created with Sketch. 27
    Atlas harbours strategic appeal

    Barry FitzGerald
    October 12, 2011 - 9:25AM

    Atlas Iron (ASX:AGO), the Pilbara iron ore producer and consolidator, is surprised as anyone that its scrip takeover bid of iron ore junior FerrAus (ASX:FRS) was wrapped up successfully in a flash.

    Atlas bid a healthy 38 per cent premium for FerrAus when it launched its June offer but nevertheless had been planning to be in the trenches for 12 months to secure control, due mainly to the competing attention of Hong Kong-listed Wah Nam.

    But when Wah Nam folded and accepted the Atlas offer last month, Atlas was given a clear run. Atlas' status as a consolidator of the junior Pilbara iron ore players was confirmed in the process, following as it did the group's earlier acquisitions of Aurox Resources and Giralia Resources.

    Garimpeiro's interest in all that is the impact of Atlas' consolidation activities on its allocations to export capacity at Port Hedland's inner harbour.

    With the FerrAus acquisition in the bag, the allocation now stands at an annual 46.5 million tonnes.

    The strategic appeal of the allocation cannot be over-stated. You can have all the iron ore in the world but it is worthless unless you can get it to market. And in the case of Atlas' one billion-plus tonnes of iron ore resources in the Pilbara, Port Hedland is the gateway.

    Allocations at the inner port are now maxed out which is why we saw BHP Billiton last week talking about the need to develop a new outer harbour to push exports beyond its 240 million tonne annual allocation in the inner harbour.

    Read more:
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.