With Chinese loan in the dumps, Fortescue to fund expansion on its own
12 Oct 2009
Australia's third-largest iron ore exporter Fortescue Metals Group, controlled by billionaire Andrew Forrest, today said that it would fund it ambitious expansion on its own after failing to get $6-billion from Chinese banks with the help of Baosteel Group.
Perth-based Fortescue said it will spend A$360 million from its own resources for the expansion of its Christmas Creek mine to take its total annual iron ore production to about 55 million metric tonnes.
It also said that further expansion to increase production to 95 million tons may also be met ''largely'' funded from cash flow.
According to analysts, Fortescue will now be spending more to achieve its iron ore production target of 55 million tonne than previously expected, but by developing a processing plant and rail link to Christmas Creek, in Western Australia's Pilbara region, would be plus sign for the company.
The Fortescue board has approved A$360 million to build an ore processing plant at Christmas Creek and to extend the existing rail line from it's another iron mine at Cloud Break to the Christmas Creek mine. Work will start next month and is expected to be completed by December 2010.
Fortescue, which sells its iron ore mainly to China, has reported a 19 per cent rise in iron ore shipped between the June and September quarters to more than 9.5 million tones and said that its mine output rose by 16 per cent between the two quarters, exceeding market forecasts.
