Posts Tagged ‘Fortescue China’

Fortescue misses funding deadline

Wednesday, September 30th, 2009

Fortescue Metals has missed the deadline for securing US$6 billion in Chinese funding.

The funding was a condition of the deal struck in August, in which Fortescue agreed to sell all its second-half iron ore production to Baosteel and the China Iron & Steel Association (CISA) at a 35% discount to last year’s prices, as long as it could raise the US$6 billion to fund its expansion plans.

Fortescue said in its announcement today that negotiations would continue, but industry analysts are concerned the chances of the deal collapsing increase the longer the discussions drag out.

Fortescue Metals Group
ASX Code: FMG
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Fortescue undercuts Rio and BHP in China

Tuesday, August 18th, 2009

Fortescue Metals Group has struck a $7.2 billion deal with the Chinese steel industry, offering to supply discounted iron ore in exchange for cheap finance and a priority place in future price negotiations.

Under the arrangement, Fortescue will provide iron ore at a 3% discount to the May benchmark price enforced by Rio Tinto and BHP Billiton.

In return for the discount, Chinese banks will be providing Fortescue with US$5.5 – $6 billion in loans, which will be used to pay off debt and boost production at the company’s Pilbara mines, with the aim of strengthening Fortescue’s position as a major player in Australia’s iron ore export market.

Both Rio and BHP have indicated the undercutting is irrelevant to their own pricing plans, however the China Iron & Steel Association said it would be using the Fortescue price in future negotiations.

ASX Code: FMG
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Light at the end of the Fortescue tunnel

Tuesday, March 31st, 2009

The West Australian has it on good authority that Treasure Wayne Swan will approve Andrew Forrest s bid to sell a significant portion of his Fortescue Metals Group to Chinese Government-controlled Hunan Valin Iron and Steel.

Although the Foreign Investment Review Board (FIRB) is yet to announce its decision, the West Australian believes it will not object to the deal in its current form, but that if Valin were to seek to increase its stake from 17.4% the government would be provoked into considerable concern .

Presumably this deal does not trigger any national security warning signals, which blocked the Oz Minerals / Minmetals takeover bid last week.

Click here to read the full article.

Stocks for your watchlist:
OZ Minerals: OZL.AX (ASX)
Fortescue Metals Group: FMG.AX (ASX)
BHP Billiton: BHP.AX (ASX); BLT.L (London Stock Exchange); BHP.N (New York Stock Exchange)
Rio Tinto: RIO (ASX and LSE)

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