Shares in Pilbara miner Atlas Iron will be in the spotlight on Wednesday after Gina Rinehart reportedly bought a significant stake in the company, just days after a similar move by Andrew Forrest's Fortescue Metals Group.
Hancock Prospecting, which operates the Roy Hill iron ore mine in Western Australia’s Pilbara region, has purchased a 19.6 per cent stake in Atlas Iron, according to a report in The Australian.
Trading in Atlas Iron shares has been heavy in recent days: more than 850 million shares changed hands on Tuesday – equal to about nine per cent of the company’s listed stock.
Almost 1.2 billion shares were traded on June 8, and more than 2.3 billion shares were traded on June 7, the day Fortescue Metals bought a 15 per cent stake.
Atlas is currently the subject of a $280 million takeover bid from Mineral Resources.
The Atlas board has supported the offer, which the suitor has said will enable both companies to maximise the value of their low-grade iron ore deposits in the face of a tough export market.
A vote on the deal is expected in July.
Fortescue’s $56 million investment in Atlas last week took its interest in the company to 19.9 per cent, with the Forrest-controlled operator saying it would not support the Mineral Resources proposal.
Atlas operates two iron ore mines in the Pilbara, owns two undeveloped projects, and has an interest in the construction of a port facility capable of handling 50 million tonnes of exports each year.