rumours out of the west australian newspaper Russians on the prowl maybe??? see below Business News Russian talk drives FMG through $6b
23rd March 2007, 7:15 WST
Fortescue Metals Group has cracked the $6 billion market barrier after its surging shares hit a fresh record close yesterday amid speculation Russian steel interests are again casting their eyes over the budding Pilbara iron ore producer.
The group fanned the flames that it had drawn the attention of prospective foreign investors yesterday after being prodded into an explanation for rampant buying which has sent the stock flying since cyclone George tore through one of its Pilbara construction camps early this month.
The stock, which touched $23.35 on Wednesday, closed 30¢ up at $22.70 to value the company at just over $6 billion.
Since George hit on March 10, Fortescue’s shares have surged almost 30 per cent — in the process making chief executive Andrew Forrest WA’s second multi-billionaire with a personal stake now valued at $2.3 billion.
In its statement yesterday, Fortescue said it “continues its practice to negotiate with various partners in regard to its normal course of stated business objectives”.
If concluded, such negotiations “may lead to agreements which would have a material impact” on the company, though they currently remained “incomplete and confidential”.
Several industry sources said there had been evidence that Russian interests were taking another look at Fortescue after missing out on a cornerstone stake last year.
The sources named Metalloinvest iron and steel billionaire Alisher Usmanov, already the biggest shareholder in Mt Gibson Iron, and fellow metals oligarch Viktor Vekselberg as possible investors.
Mr Vekselberg was an early supporter of Brian Gilbertson’s Pallinghurst Resources private equity vehicle which is now offering $320 million for control of WA nickel and manganese miner Consolidated Minerals.
Fortescue executive director Graeme Rowley would neither confirm nor deny yesterday that Fortescue was negotiating with Russian interests.
“I’ve had that question asked a couple of times today,” he said.
However, it would be inappropriate and premature to expand upon the company’s formal statement, he said.
In its statement, Fortescue noted that a number of analysts had just upgraded their iron ore price forecasts for next year and that Fortescue had been added to the FTSE All World Index in London, underpinning interest in the stock.
It also said its stock was being rerated as work progressed at its $3.7 billion Pilbara iron ore project.
Though Fortescue has admitted that it will no longer be able to ship first ore in March next year due to the impact of cyclone George, it still expects to start iron ore exports from Port Hedland by mid-2008.
The project is slated to ship about 30 million tonnes of ore in its first year, rising to 45 million tonnes a year within 18 months.
JOHN PHACEAS
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FMG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
(20min delay)