Billionaire Andrew Forrest’s pure play iron ore miner Fortescue Metals has acquired a 19.9% stake in Atlas Iron, enough to block Mineral Resources’s takeover.

Fortescue announced it had agreed to acquire 15% of Atlas Iron at $0.04 a share, bringing its aggregate interest in the junior iron ore miner to 19.9%.

“Fortescue does not intend to support the proposed Scheme of Arrangement between Atlas Iron and on its current terms, but reserves the right to do so,” the company said in a statement.

Atlas Iron and Mineral Resources Limited, a Perth-based company with a diversified portfolio including significant lithium resources, in April announced a $280 million all scrip takeover.

The deal, which would have seen Atlas’s Pilbara iron ore assets consolidated with that of Mineral Resources, is via a Scheme Implementation Deed to acquire all of the shares of Atlas.

A key benefit to the combined business would be a lower per tonne cost for iron ore.

Atlas Iron was an early victim of falling iron ore prices. Atlas in April 2015 announced it was mothballing its mines because it was costing more to dig up the ore than buyers were willing to pay.

The crash in iron ore prices was then driven by softening Chinese demand. Since then the company has restructured, global prices have surged and the miner is cash flow positive.

In the latest half year results, Atlas posted a statutory net loss after tax of $21 million. Sales were $308 million, down from $498 million.

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