Atlas Iron managing director Ken Brinsden has given the clearest indication yet that the long-standing battle over shared infrastructure between it and other Pilbara iron ore miners is opening up, saying companies are now taking a more "pragmatic" approach to the scenario.
It comes as Mr Brinsden indicated the feasibility study into a landmark bid to build the Pilbara's first genuine multi-user iron ore rail line involving Aurizon (formally QR National), Atlas and Brockman Mining could be released within a month.
Speaking yesterday after Atlas lifted its ore reserves by 21 per cent to 499 million tonnes, Mr Brinsden said the resource upgrade was just one of the factors which helped justify an investment in independent Pilbara infrastructure.
Although he believed Atlas had the mine life and planning necessary to validate any future multi-user rail investment, he said the age-old question concerning the feasibility of its customer base remained. "I don't want to put words in Aurizon's mouth, but that's basically what they're going to be looking for . . . the critical mass in the customer base to make an independent network like that work," he said.
"And I think Atlas is as well placed as it has ever been to realise an infrastructure solution that allows us to unlock the remaining Pilbara resource base . . . just look at the reserves we announced (yesterday).
"Some people have argued that we're dealing in relatively short mine lives, and to a certain extent that's true . . . but if you look at today's reserve, let alone what we think we can unlock in the future, we're looking at seven to 10 years of mine life.
"We also have a useful foot on port capacity in Port Hedland harbour, so I think those two factors indicate we will play an important part in the resolution."
Atlas trucks ore from its Pilbara mines to the Utah Point facility at Port Hedland and needs a rail solution to grow beyond 15mtpa. It currently ships about 7mtpa.
The Aurizon study into a Pilbara rail network is designed to break the dominance of miners such as Fortescue, BHP Billiton and Rio Tinto and was expected to be completed in December with construction finished as early as 2015. However, Aurizon chief executive Lance Hockridge announced a potential six-month delay in November.
In order to find a solution to the infrastructure stalemate, Atlas has also been in talks with both Gina Rinehart's Hancock Prospecting and Fortescue Metals over a shared rail solution.
Hancock Prospecting is notorious for keeping its cards close to its chest, but most recently indicated a preference to go it alone. Fortescue has been reluctant to comment on negotiations.
Mr Brinsden remained on the fence as to which scenario Atlas would go down.
However, amid volatile ore prices, he said the conversation between fellow iron ore miners was easier today than it had been historically.Atlas shares closed up 4.5Â¢, or 2.96 per cent, at $1.56.
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