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BREAKFAST DEALS: All aboard Atlas
Alexander Liddington-Cox
Published 7:26 AM, 26 Apr 2012

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Atlas Iron and QR National could be about to change the balance of power in the Pilbara. Reports indicate that the pair is poised to announce a feasibility study into building a railway line for smaller miners, breaking the infrastructure stranglehold that the big three iron ore miners enjoy in the region. Spotless Group has apparently floated a third takeover idea to break talks with Pacific Equity Partners into something real. Elsewhere, Rio Tinto has become the subject of speculation about a UK-listed mineral sands miner, CVC Asia Pacific has received a dose of good news and bad news for its Nine Entertainment defence and Andrew Forrest is playing white knight with a small gold miner.

Atlas Iron, QR National

Atlas Iron is on the brink of announcing a feasibility study in conjunction with QR National to build a multi-billion dollar railway line in the Pilbara for junior and mid-tier producers. According to media reports, the study could be announced as soon as today, giving smaller players in the area a chance to move their product from east of the Pilbara to Port Hedland Port, without having to deal with the big three producers Rio Tinto, BHP Billiton and Fortescue Metals Group.

Finding iron ore is a relatively simple exercise compared to finding a place to ship it from in a cost effective manner. Rio, BHP and Fortescue guard their infrastructure carefully. Gina Rinehart’s Hancock Prospecting is constructing its own railway to connect the Roy Hill project – the one that’s pushed Rinehart’s net worth to $20 billion – to Port Hedland.

It won’t be just Atlas Iron that’s set to benefit from any new rail line. Brockman Resources, currently being mopped up by Hong Kong’s Wah Nam International, and Flinders Mines, currently being pursued by Russia’s Magnitogorsk Iron & Steel, are both in line to benefit. Curiously, both of these suitors have hit problems in their quest to nab their targets, although it looks like the rewards could be substantial.