Phil Falcone's Harbinger Capital upped its stake in Midwest Corporation again yesterday in a move that will further dent Sinosteel Corp's hopes of securing more than a simple majority stake in the WA iron ore junior.

Harbinger increased its stake in the iron ore company from 12.5 per cent to 15 per cent, with the capital changing hands at between $6.40 and $6.52 a share, above the $6.38 cash price Sinosteel is offering as part of its $1.4 billion takeover bid.

Midwest closed the day up 3c to $6.54 with more than 6.5 million shares changing hands.

Harbinger's acquisition follows its aggressive on-market raids since a Midwest-Murchison merger proposal collapsed last week.

The merger collapse allowed Harbinger, which is Murchison's biggest shareholder, to reignite its buying spree of Midwest shares without attracting the ire of Sinosteel and interference from the Takeovers Panel.

In addition to lowering Harbinger's average entry price in Midwest - Mr Falcone paid more about $7 a share for his initial 9 per cent stake as a show of support for the Murchison merger proposal - the aggressive buying means he is mopping up Midwest minority shareholders who would have otherwise been destined to accept the lower Sinosteel offer.

Sinosteel remains stranded on 52.5 per cent, enough to ensure boardroom control of Midwest, although it is likely to have to rely on minority shareholders to approve related-party deals such as Midwest-Sinosteel joint venture agreements and off-take arrangements.

Murchison, which acquired a 10 per cent stake in the lead-up to its Midwest merger plan announcement, has already vowed not to accept Sinosteel's offer.

Harbinger, by virtue of its buying spree, is also hinting it will not accept Sinosteel's offer, while Midwest's deputy chairman David Law, who owns 13.2 per cent, is yet to show his hand.

It leaves 35.7 per cent of Midwest locked up in three anti-Sinosteel hands, with less than 10 per cent of free float.

Sinosteel's unconditional offer is due to close on Friday.

The Chinese suitor is expected to extend the offer at the last minute if it believes it has a reasonable chance of mopping up Midwest's dwindling free float.