* Fortescue "reserves right" to support Atlas buyout
* May be after more access to Port Headland -Foster Stockbroking (Adds analyst comment in paras 4-7)
June 7 (Reuters) - Australia's Fortescue Metals Group FMG.AX said on Thursday it has built up a 19.9 percent interest in small iron ore miner Atlas Iron Ltd AGO.AX , giving it a large enough stake to block a takeover of Atlas by Mineral Resources Ltd MIN.AX .
Fortescue, the world's No. 4 iron ore miner, said it would not support Mineral Resources' A$280 million ($214 million) takeover of Atlas announced in April on the current deal terms, but said it reserved the right to do so.
Mineral Resources said at the time that the amalgamation of its existing Pilbara iron ore assets with those of Atlas would lead to greater synergies and economies of scale, helping to drive down costs. hold the view this makes it more difficult, but not impossible, for the proposed scheme ... to pass at a shareholder vote," said Foster Stockbroking said in a report. The vote would need 75 percent approval from Atlas shareholders to pass.
Fortescue will be looking for more access to capacity at Port Headland on Australia's northwest coast, given its proposed Eliwana project is set to ramp up to 30 million tonnes a year as soon as the second half of 2019, Foster Stockbroking said.
"We view FMG's increased stake as a blocking one, and not as a counter bid per se for AGO, at this stage," it said.
Fortescue reserving the right to support the scheme may indicate it wants to negotiate with Mineral Deposits on sharing Port Headland infrastructure, the brokerage said.
Fortescue said it had agreed to buy a 15 percent stake in Atlas at A$0.04 per share, or A$55.7 million. Including a cash settled swap, it will hold 19.9 percent in Atlas.
Atlas Iron shares closed down 12.5 percent on Thursday, erasing the year's small 3.5 percent gains.
The broader market .AXJO was up 0.5 percent.
($1 = 1.3067 Australian dollars)