where is it safe to write about io prices?, page-13

Yet another article from Businessday re massive planned increase in IO production... this time from FMG. Plan to triple current prod from 50-155 tons by mid-2013. That's less than 2 years!! How these decisions are made staggers me. Sums being spent are incredible.

'October 26, 2011 - 10:05AM
Iron ore exporter Fortescue Metals Group has received a boost to its expansion plans, revealing strong support for a $US1.5 billion fundraising.

The money, which has been sourced through senior unsecured notes, will help fund the company's ambitious plan to expand its iron ore production to 155 million tonnes by 2013.

The notes have an eight-year term and will fetch an interest rate of 8.25 per cent.

Advertisement: Story continues below Fortescue had been expected to raise closer to $US1 billion, but said in a statement to the ASX that ''strong demand'' had enabled them to ''upsize'' the funding to $US1.5 billion.

The expansion has been previously budgeted at $US8.4billion, and while that figure was not used by the company in the statement, a spokeswoman confirmed this morning that the $US8.4 billion budget remained in place.

Analysts have long been sceptical over Fortescue ability to keep the budget within $US8.4 billion given the inflationary environment in the Pilbara region of Western Australia where the company's projects are located.
The company is hoping to ship 55 million tonnes of iron ore this financial year, but will have to increase its current rate of production to achieve that target.