August 6, 2018 / 2:53 AM / a year ago

Australia's Fortescue Metals cuts stake in Atlas Iron

FILE PHOTO: A front end loader works at Atlas Iron's Pardoo mine, near Port Hedland, about 1,600 km (960 miles) north of Perth in this June 23, 2010 file photo. REUTERS/Tim Wimborne/Files

(Reuters) - Iron ore miner Fortescue Metals Group (FMG.AX) said on Monday it reduced its stake in smaller peer Atlas Iron AGO.AX by 8.53 percent, or A$33.2 million ($24.6 million), as per Atlas shares’ closing level on Friday.

Fortescue had built up a 19.9 percent interest in Atlas in June, giving it a large enough hold to block a takeover by then suitor Mineral Resources Ltd (MIN.AX).

However, Atlas endorsed a A$390 million ($288.6 million) offer from billionaire Gina Rinehart’s Hancock Prospecting later that month.

Fortescue eyes more access to capacity at Port Headland in Pilbara, keeping the proposed ramp up of its Eliwana project in focus, a brokerage said in June when Fortescue had initially built up its stake in Atlas.

Hancock and Fortescue covet Atlas’ rights at Australia’s biggest iron ore port, Port Hedland, given limited opportunities for expansion.

However, Atlas said later the government had notified it that its North West Infrastructure joint venture does not have priority rights to develop shipping berths including ones at Port Headland.

“Fortescue will actively participate in the proposed industry consultation with the Western Australian State Government regarding berth access at Port Hedland,” said Chief Executive Elizabeth Gaines on Monday.

Shares of Atlas rose 1.2 percent while Fortescue moved 1.1 higher with the Australian benchmark rising 0.7 percent.

Reporting by Devika Syamnath in Bengaluru; Editing by Gopakumar Warrier

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