Glencore is stepping into iron ore in Australia, after buying a stake in Atlas Iron.
The diversified commodities company bought an 8.47 per cent stake in Atlas Iron, valuing the deal at around $15.08 million at Atlas Iron’s current share price of $0.02.
The stake was acquired via Glencore’s subsidiary Maru Sky.
This acquisition makes Glencore – via Maru Sky – one of the largest shareholders in the miner, with the Commonwealth Bank the next largest at 6.36 per cent.
Atlas Iron is likely to use this new found cash to pay down its existing levels of debt, following other iron ore miners taking the same route during this current rally of the commodity price, after Rio Tinto and Fortescue announced plans to pay down billions in gross debt through early repayment of notes on the back of a stronger iron ore price.