fortescue deal still likely, analyst

Fortescue deal still likely, analyst

From mining australia

FORTESCUE'S IRON ore supply
agreement with China is unlikely
to be derailed after the company
failed to meet this week's $6
billion funding deadline, a leading
resource analyst told MINING
DAILY.
According to James Wilson
of DJ Carmichael, the 20 million
tonne export deal with Baosteel
Group and China Iron & Steel
Association (CISA) is too important
to Fortescue's future growth for the
company to abandon.
"I am sure neither Fortescue nor
CISA would walk away from what is
the potential ‘be all and end all’ of
expansions for Fortescue," he said.
"They are looking to go from 45
million tonnes of production up
to 155."
Media and industry speculation
that the export deal may have now
fallen through after the passing
of the funding deadline is, Wilson
says, somewhat premature.
"There has been a rush of blood
to the head suggesting that the
deal is off because it went past 30
September," he said.
"Fortescue has to be friendly to
CISA because they are the ones
who are helping them raise the
money, while CISA has to be friendly
to Fortescue because they are
the ones supplying the raw material
they need.
"I think that maybe has gotten
a lost on people over the last few
days."