Fortescue Metals Group Limited (ASX:FMG) has reached an agreement with Iron Ore Holdings Limited (ASX:IOH) to cease the development of the Iron Valley deposit in Western Australia.
Fortescue says both parties have agreed to an early termination of its exclusive option on Iron Valley, part of the extended Nyidinghu mining program, as previously agreed under an MOU in February last year.
Iron Ore Holdings will pay Fortescue $4 million in consideration for the early termination of the option period, which had been due to expire in March.
The company’s say the joint decision to terminate was based on the current development focus of each company.
Fortescue says further development of the Nyidinghu program will be based on customer requirements and market conditions.
Fortescue Metals Group generated a net profit of $1.5 billion in the 2012 financial year.
FMG Price at posting:
$4.86 Sentiment: None Disclosure: Held
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