Fortescue Metals Group Ltd said on Thursday it had shipped its first iron ore with a consignment to the booming China market, amid reports it may be the latest Australian miner in the sights of Chinese investors.
Fortescue said the 180,000-tonne shipment went to Baoshan Iron and Steel Company, China's biggest steelmaker, said to be one of several Chinese firms seeking a stake in Fortescue in a bid to lock in steady raw materials supplies. Fortescue founder Andrew Forrest said he would welcome any Chinese firm as an investor.
Chinese steel mills' insatiable appetite for iron ore to feed a growing steel industry has helped push prices higher for six straight years, delivering huge profits to Australian miners, including BHP Billiton Ltd and Rio Tinto Ltd It has also triggered a rush by Chinese companies to invest in Australian miners.
Chinese aluminium maker Chinalco in February paid $14 billion for 9.3 percent of Rio Tinto and this week was rumoured to be in the market for 10 percent of BHP Billiton.
The Australian newspaper reported earlier this week that three Chinese companies, including Baosteel, were looking at taking stakes in Fortescue.
Fortescue, whose stock has more than tripled in the past year as iron ore prices have soared ahead of its initial shipment, was in the process of completing full commissioning of its mine, which will see annual output of 55 million tonnes of ore at full speed.
He said he hopes to see annual output rise to more than 100 million tonnes eventually as more deposits around its mine are exploited.All of its output will go to China.
Fortescue remains locked in legal battles with Rio and BHP over access to their railways and ports in the Pilbara region in western Australia, which both companies rely on to ship ore and refuse to share.
Source: Reuters
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