June 29 (Bloomberg) -- Hebei Iron and Steel Group is in negotiations with Atlas Iron Ltd. about purchasing a stake in a Western Australian iron-ore mine, the China Daily reported, citing unidentified people familiar with the matter.
Hebei Steel wants to buy a stake in the Ridley project in the Pilbara region as it doesn’t have overseas resources, the paper said. Atlas Chief Executive Officer David Flanagan was in a board meeting and unavailable for comment when contacted in Perth today.
Atlas, the Australian iron-ore producer set to expand output fivefold this year, is in talks with three groups from Asia and the Middle East to sell a stake in its A$2.7 billion ($2.4 billion) Ridley project, Flanagan said June 23.
Steelmakers worldwide are increasing purchases of iron ore, used to make steel, as the economic recovery fuels demand from carmakers and builders. The Ridley project is expected to yield 15 million tons of ore annually over 35 years.
Atlas said in January it expects to sell a stake in Ridley by the end of the first half after lining up buyers from China, India, South Korea and Japan. Atlas would prefer to sell about 75 percent of Ridley and would be willing to sell all of it, Flanagan said.
Shares of Atlas rose 2.4 percent to A$2.18 at 11:35 a.m. in Sydney trading on the Australian stock exchange.
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