Atlas close to securing rail deal with FMG

Atlas Iron is close to securing a deal that could see it gain access to Fortescue Metals Group's rail line in the Pilbara, according to a Bank of America Merrill Lynch analyst.

Fairfax Media reports after meeting with Atlas last week, analyst Peter O'Connor told clients the two companies were close to reaching an agreement.

 

“[Atlas] expect to be able to do a deal with FMG. Sounds like they expect to make an announcement on this in the next two-three months,” he said.

 

According to Fairfax Media the timeline coincides with FMG's schedule to sell a minority stake in its port and rail infrastructure.

 

While Atlas will not be involved in the $2bn-$3bn deal, the sale is expected to open the door for Atlas to negotiate access to the railway.

 

Atlas has previously been working on a study exploring the option of building a new rail line through the Pilbara, but most commentators doubt the concept will be realised.

 

Rail access has long been a sore point for Pilbara miners, and FMG has previously failed to secure a deal to share access on rail assets owned by BHP Billiton and Rio Tinto.

 

Late last year FMG won a High Court appeal over access to the Rio and BHP networks, but negotiations between the companies are ongoing.

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