article from youn tim, page-2

"payment of a premium price" haha

seriously, I can't see how this can be good news for any junior if the bid isn't trumped, because it means no one seriously believes 3rd party access will happen in the forseeable future....which leaves plenty stranded

here is an interesting article taken off the FMS thread...just how desperate is Twiggy for high grade ore for blending (second last paragraph)?

Fortescue says technical woes ironed out
20/10/2009 7:54:12 PM

Fortescue Metals Group Ltd's technical woes at its mines in Western Australia's Pilbara region appear to have been ironed out.

Executive director Graeme Rowley emphasised Fortescue's rising production rates, driven by processing improvements and contributions from its second mine in the region, named Christmas Creek, at a site tour for media on Monday.

The company's billionaire chief executive Andrew Forrest said he accepted Fortescue had had its fair share of sceptics in recent years but this sentiment was being dispelled as it incrementally delivered better production.

CMC Markets analyst David Taylor said Fortescue had been hampered by much-reported teething problems - high levels of alumina and too much moisture in its ore - but there was still good reason to believe in the company.

Fortescue says it has overcome the alumina problem with the commissioning of a de-sand plant, while dry ore from Christmas Creek had been blended with wet ore from the company's first mine, named Cloudbreak, resulting in a product with strong sintering qualities.

However, the de-sand plant had consumed a substantial amount of human and financial resources that would otherwise have been channelled towards ambitious expansion plans.

The aggressive growth targets were substantially downgraded amid the global financial crisis, but Fortescue says they are now back on the table.

Mr Forrest remains characteristically bullish that the plans can be delivered, despite the company recently being unable to secure debt funding from Chinese banks.

He told reporters on Monday that the door remained open for potential deals with such entities.

He also said the company had been offered "very significant sources of capital from the traditional markets like the United States".

"There is considerable capital available there and across Asia," he said.

Mr Forrest said the company would have little need for external finance while operating its first two mines, but funds would be sought when it began to develop its highly prospective Solomon project, also in the Pilbara, in several years.

Mr Taylor said Mr Forrest had good relationships with potential Chinese funders and had back-up financing plans, while operational concerns were being assuaged by diversified production.

"I"m a long-term bull on Fortescue and think it has got plenty of legs," Mr Taylor told AAP.

"There are record levels of demand for iron ore coming out of China at the moment and that is expected to grow, so obviously they are leveraged to that.

"Their funding seems to be under control and their expansion plans, despite a few haircuts, also seem to be on track.

"It's a difficult market to be in, but I think they are doing their best."

Mr Forrest told reporters that iron ore price negotiations for the contract year beginning April 1 were expected to be "going into a strong market".

He also said the door was open for a possible joint venture in the Pilbara with Flinders Mines Ltd, whose main project neighboured Fortescue's Solomon iron ore project.

This could be similar to the joint venture Fortescue and BC Iron Ltd entered into in August for the Nullagine project in the Pilbara.

Under that deal, Fortescue secured a half stake in the project in return for the provision of rail haulage, port handling and ship-loading facilities.

On Tuesday, a Fortescue spokesman downplayed reports the miner may seek to blend its coarse fines iron ore with the ultra-fine iron ore of Brazilian giant Vale to suit Chinese steel mills.

"We're not involved in any talks (with Vale)," the spokesman told AAP.