Atlas Stalls Ridley Iron Ore Mine Sale Pending Australian Election Result
Atlas Iron Ltd., an Australian iron ore producer, said it will withhold selling a stake in its Ridley mine until after the national election later this month because of uncertainty over a proposed mining tax.
Talks are continuing with groups in China, Chief Executive Officer David Flanagan said today, without naming any buyer. The Perth-based company is looking to sell 50 percent to 80 percent of the mine in Western Australia’s Pilbara region.
“A key issue we are always talking about with these groups is the tax,” Flanagan told reporters today in Melbourne. “There’s lots of uncertainty because it is a big investment.”
Australia’s Prime Minister Julia Gillard scaled back a proposed 40 percent tax on mining profits to a 30 percent levy on iron ore and coal earnings after ousting Kevin Rudd in June. Atlas, seeking to expand output fivefold this year, is in talks with three groups from Asia and the Middle East to sell a stake in its Ridley project, Flanagan had said earlier.
Atlas gained 2.4 percent to A$2.17 at the close of trade in Sydney. Of 10 analysts covering the stock, six recommend investors “buy,” while the remaining recommend “hold,” according to data on the Bloomberg.
Flanagan said he won’t vote for Gillard’s government in the national election on Aug. 21. Atlas is a member of the Association of Mining and Exploration Companies that has resumed an anti-tax advertising campaign this week.
“Given where we are right now, really we can’t afford to risk having this tax in our country,” Flanagan said. “That means I won’t be voting for the current labor government.”