Fortescue says closer to exporting ore to China
SYDNEY, April 7 (Reuters) - Fortescue Metals Group Ltd (FMG.AX) said on Monday it was on track to begin exporting millions of tonnes of ore to China in May after loading its first train load of ore from a new mine in the Australian outback.
The company plans to initially ship around 45 million tonnes of ore to Chinese steel mills starting next month, making it Australia's third-largest iron ore miner behind Rio Tinto Ltd/Plc (RIO.AX)(RIO.L) and BHP Billiton Ltd/Plc BHP.X(BLT.L).
"This is the first and vital step to commissioning the entire operation," Fortescue Chief Executive Andrew Forrest said in a statement.
Eventually, annual ore shipments could increase to around 200 million tonnes, depending on the company's ability to dig new mines and gain access to rail lines linking the remote Pilbara region of Western Australia with ports on the Indian Ocean.
While laying hundreds of kilometres of its own rail lines, Fortescue is also waging a legal battle to gain access to lines used exclusively by Rio and BHP.
"Fortescue is the one small company that is taking on the majors with an eye to becoming a major itself," said James Wilson, a mining analyst for DJ Carmichael & Co in Perth.
"The company is trying very hard to show it can deliver on its timelines," he said.
A promise to turn rust-red iron ore into gold for investors has helped Forrest become Australia's richest man, worth more than $7 billion.
Worldwide, iron ore prices have risen six years straight, increasing a whopping 65 percent for some miners in 2008 alone, thanks to an appetite among Chinese steel mills for imported ore required in the initial stages of steelmaking.
From just a few pennies in 2003, stock in Fortescue galloped to more than A$60 ($55) before a 10 for one split in December. The stock was 4 percent higher at A$7.26 in afternoon trading, bucking a negative trend in the wider S&P/ASX 200 .AXJO. ($1=A$1.09) (Reporting by James Regan)
