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Fortescue aims for 'impossible dream'
By Dianne Bain

Posted Tue Jun 19, 2007 8:38am AEST
Updated Tue Jun 19, 2007 8:46am AEST


Fortescue has just under 300 days to meet its ambitious deadlines. (ABC TV)

Video: Fortescue iron ore plan under scrutiny (Lateline Business) Map: Port Hedland 6721
A plan by Fortescue Metals Group (FMG) to raise $1 billion to expand its operations has attracted the scrutiny of industry analysts.

But the company's plan to raise the money could see the iron ore hopeful downgraded by ratings agencies.

Analysts are taking a close look at the deal which Fortescue hopes will eventually enable it to rival BHP Billiton's iron ore output.

Fortescue has just under 300 days to meet its ambitious deadlines and realise what it calls " the impossible dream" and now the company is upping the stakes.

Rating agencies fear the aggressive plans could cause delays and analysts are cautious.

Executive director of Fortescue Metals, Graeme Rowley, says there is there is an enormous market demand for iron ore that cannot be ignored.

To that end, Fortescue wants to speed up construction of its $2.7 billion Pilbara rail, mine and port project In Western Australia as well as expand it.

The company says it hopes to increase exports from 45 to 60 million tonnes a year by 2009, eventually reaching 200-million tonnes a year.

But the mining hopeful denies the latest round of fundraising will go towards paying for cost blowouts.

"We're still focused very much on completing this project within the original budget," Mr Rowley said.

Fortescue still has a number of obstacles it needs to overcome before it can go ahead with its plans.

Firstly it will need to convince bondholders their investment will not be jeopardised and then it will need government and environmental approvals before it has any hope of getting the extra money it needs in the bank before the end of the year.




Tags: business-economics-and-finance, mining, port-hedland-6721
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