A rail access deal between Fortescue Metals Group and Atlas Iron appears to be firming in what looms as a determining year for Australia's iron ore sector.
Atlas executives have left analysts with the impression that a deal to transport its iron ore on Fortescue's railway line will be struck within three months.
That timeline coincides with the schedule that Fortescue has outlined for the sale of a minority stake in its rail and port assets.
While Atlas will not be a buyer of that $2 billion to $3 billion stake, a sale to an infrastructure company or pension fund looks likely to facilitate an arrangement where another miner uses Fortescue's railway.
Atlas has about 30 million tonnes of growth assets located more than 400 kilometres south-east of Port Hedland, but close to the railways of both Fortescue and BHP Billiton.
After meeting Atlas' chief financial officer, Anton Rohner, this week, Bank of America Merrill Lynch analyst Peter O'Connor wrote to clients saying: "[Atlas] expect to be able to do a deal with FMG/TPI. Sounds like they expect to make an announcement on this in the next two-three months."
Atlas has been working with Aurizon and Brockman Mining on a study into the feasibility of building a new multi-user railway in the Pilbara, and while that report is due soon, most pundits believe the concept will not be realised.
Iron ore prices are widely tipped to fall as supply volumes rise over the next two years, and construction of a new railway may take too long for exporters desperate to cash in on the last of the high prices.
When asked if a deal with Fortescue was firming as the most likely option for Atlas, chief executive Ken Brinsden said; "We are absolutely open-minded to all the options but it's hard to ignore the fact that FMG already has a rail network on the ground, there's no point avoiding that."
Negotiations between rival companies over access to railways in the Pilbara have been notoriously difficult over the past decade, but the recent cooling of the iron ore sector appears to be breaking down barriers.
Atlas badly needs a positive driver for its share price, which reached its lowest point in more than four years on Friday at $1.17.
The share price is now lower than it was in September when iron ore dropped below $US87 a tonne, despite the current benchmark iron ore price being quoted as $US134.