Gina Rinehart's Hancock Prospecting has made a bid for Atlas Iron that values the junior miner at $390 million.
Hancock subsidiary Redstone has made an all-cash bid of 4.2 cents per share - a 44 per cent premium on the stock's value before Ms Hancock and Andrew Forrest's Fortescue Metals Group each took a near-20 per cent stake earlier in June.
The bid trumps the proposed $280 million all-scrip bid by Mineral Resources announced in April, and Atlas says it will now consider the proposal along with Mineral Resources' right to respond with an increased offer.
Hancock executive director Tad Watroba said Atlas' assets offered potential long-term benefits alongside other assets in Hancock's portfolio.
"There is potential to unlock value through the future development of Atlas resources as part of our wider system of operations," Mr Watroba said in the bidder's statement.
"If we obtain control of Atlas, we intend to conduct a strategic review to better understand the most appropriate time and means to develop and integrate Atlas into the existing operations of the Hancock Group."
Atlas's assets include a stake in a joint venture that holds rights to potentially valuable undeveloped port capacity in Port Hedland.
The Western Australian government last week said any development application would be judged on merit as the berths are set aside for junior miners, which potentially rules out Hancock and Fortescue.