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Diamond Partners

FMG

Time:2014-03-18 10:13:11    Views:598040    Origin:Boao Forum for Asia

FMG

A Dynamic Organisation

From the moment Fortescue Metals Group (FMG) discovered world-class deposits of iron ore in the Pilbara region of Western Australia, it has been redefining the industry. Since its formation in 2003, Fortescue has evolved from a grassroots explorer into the world’s fourth largest producer of iron ore. Fortescue recognised the potential of Asia and as the region has grown in size and strength, so too has Fortescue. Listed in the S&P/ASX20 share index, Fortescue has firmly established itself as one of the world's leaders in iron ore production and sea-borne trading.

The New Force in Iron Ore 

Construction began at Fortescue’s first mine, Cloudbreak, in 2006, while work also began on a 256 kilometre rail line from Cloudbreak to Port Hedland and on world class facilities at Herb Elliott Port. Fortescue’s growth has been unprecedented, with the company constructing an additional four mines across two hubs with a total production capacity of 155 million tonnes per annum; it operates the fastest and heaviest rail network in the world where every day 13 trains, each 2.7 kilometres long, transport 32,880 tonnes of ore from mine to port; its port operations have an export capacity of 155 million tonnes a year, with each ship sailing with enough iron ore to build the equivalent of four Sydney Harbour Bridges.

Fortescue continues to build upon its close relationship with its  Asian partners. Since shipping its first cargo of iron ore to Baosteel, one of China’s largest steelmakers, in May 2008, it has accumulatively supplied China with more than 300 million tonnes of iron ore to help meet rising demand. Fortescue is also working closely with Taiwan’s Formosa Plastics Group and Baosteel as construction has commenced on the Iron Bridge Project in the Pilbara with first production targeted for early 2015.

Fortescue is focusing on improving efficiencies and paying down debt. The company has repaid US$3.07 billion of debt since November 2013 and renegotiated lower interest payments on a $5 billion loan, which will save $300 million a year in interest payments and generate greater shareholder value.

Fortescue’s success has strengthened Australia’s trade and investment relations with its Asian partners, particularly China. The Hunan Valin Group’s 2009 investment in Fortescue has been a major success for Chinese investment in the overseas resources sector. Hunan Valin Group is now Fortescue’s second largest shareholder. Fortescue has pursued a win-win approach with its Asian partners. Its products are exported to Asia, particularly China, and much of the materials and equipment imported for its development and expansion come from Asia, including, significantly, China.  Fortescue’s commitment to sponsoring the Boao Forum demonstrates the importance the company attaches to the continued dialogue and strengthening of relationships among the people of Asia where Australia and Fortescue belong.