Hebei Iron and Steel seeks Ridley stake

Hebei Iron and Steel Group, the largest steel producer in China, is currently in talks with Atlas Iron (AGO.ASX) to purchase a stake in the Ridley magnetite project in Western Australia, reported state media. The company is looking to purchase overseas iron ore sources, according to an anonymous source. The Ridley project is forecast to yield an annual 15 million tons of ore for the next 35 years. Hebei has shifted its attention to a partnership with Atlas Iron after talks with Aurox Resources (AXO.ASX) fell through. Aurox and Atlas are now merging to form a company with an expected annual output of 26 million tons of iron ore by 2014. Atlas has previously said that it would prefer to divest 75% of the Ridley project but would sell 100% for the right price.