The takeover is an act of mercy. The allocation of port capacity...

The takeover is an act of mercy. The allocation of port capacity to atlas requires that capacity to be utilised. The government has a use it or lose it policy.

Atlas has a declining production profile and seems incapable of financing the required replacement tonnages. A cynic might say that the Atlas move to mine gate purchase of lithium ore and manganese is a means of placating the government. If they lose port allocation, or have it reduced due to under utilisation it’s game over and lights out.

AGO acquired AXO for hundreds of millions to access “port allocation”. It does not own physical port capacity and underperformance would ultimately result in loss of the allocation. It is compelled to operate marginal iron ore mines so that it can keep its port allocation, so that it can continue to operate marginal iron ore mines.

Cocaine users get high so they can work harder to make more money to buy more coke so they can work harder,