All over bar the shouting after Gina Rinehart’s Hancock Prospecting has won the battle for control of struggling iron ore miner Atlas Iron.
Her company told the ASX yesterday that its stake had ticked over the 90% compulsory acquisition level and remaining Atlas shareholders will be forced to accept the 4.6 cents a share offer. The offer formally closes at 5 pm on Friday.
Mrs. Rinehart has twice had to sweeten her original $390 million cash bid for Atlas to gain full control of the company, with her latest offer representing values the small miner at $427 million.
Hancock will then move to have Atlas removed from the ASX.
Hancock chief executive Garry Korte said the company would now turn its attention to how best to integrate the Atlas business into the Hancock Group.
The company the Mt Webber low-grade iron ore mine in the Pilbara and trucks its ore to Port Hedland for export through the Utah Point multi-user berth.
However, the acquisition provides Hancock with its first fully-owned and operating iron ore mine. But it is not what Chinese steel mill buyers want – they are chasing ore with an iron content of 61% to 62% and higher because it produces more steel, takes less processing and generates less pollution.
This desire for higher grade ore is why Fortescue Metals (which was a rival bidder for Atlas and sold out last week) is upgrading its iron ore quality with a new mine to produce ore around the 60% iron level.
Hancock holds a 50% interest in the 47 million tonne-a-year Hope Downs project in a joint venture with Rio Tinto and owns 70% in the Roy Hill project, an integrated iron ore mine, railway and port project with a nameplate capacity of 55 million tonnes a year.
