look carefully at the wording of announcement, page-6

The wording is important. The media reported it differnetly to the way I read it:

"the condition subsequent relating to the completion of
finance by 30 September, 2009 will not be met in time"

The condition to provide a finance deal on terms acceptable to FMG by 30 Sep has not been met. Therefore - no discount on IO prices. Baosteel and CISA failed to meet the terms of the previous agreement. There is no deal - yet!

"Fortescue intends to continue working co-operatively with CISA including the provision of attractive iron ore pricing if requested"

Despite the timeline not being met, FMG will continue to work with CISA and the option for attractive iron or pricing is still on the table. The deal can still happen.

Perhaps FMG is making the point that the terms are meant to be agreeable to FMG and it needs to be completed in a timely manner. I don't think FMG want this negotiation to be protracted like CISA's iron ore pricing negotiations.

It makes sense for the Chinese to get this deal through. It is in both FMG and China's best interest.

Then again, perhaps I have misread the release!