December 10, 2012, 10:16 AM BC Iron Nears Deal With Fortescue...

December 10, 2012, 10:16 AM BC Iron Nears Deal With Fortescue for Nullagine
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By David Winning and Gillian Tan

BC Iron BCI.AU +0.34% is closing on in a deal with Fortescue Metals Group FMG.AU +1.58%that will likely see an overhaul of the ownership structure of its Nullagine iron ore joint venture in Western Australia state, two people familiar with the matter said.

BC Iron, which is being advised by Perth-based Azure, entered a trading halt early Monday pending a potential material transaction and a deal could be announced later Monday.


Bloomberg News Ownership of the Nullagine joint venture is currently equally split between BC Iron and Fortescue. The project is producing at an annualized rate of around 5 million tons of iron ore, used to make steel, with exports taking place out of Port Hedland.

Fortescue—the world’s fourth-largest producer of iron ore—has been considering a range of asset sales to raise funds since being caught out by falling commodities prices. The company appointed Macquarie Capital MQG.AU +0.06%to advise on any transactions, a separate person told Deal Journal Australia last month.

“We’ve had strong interest from a number of parties looking to invest in our world class mining and infrastructure assets,” a Fortescue spokeswoman said then. In October, Fortescue said it had secured a US$5 billion credit facility, which it used to restructure its existing debt.

BC Iron managing director Mike Young declined to comment, a Fortescue spokeswoman did not return calls for comment.

http://blogs.wsj.com/dealjournalaustralia/2012/12/10/bc-iron-nears-deal-with-fortescue-for-nullagine/