Reuters 15 Aug. 2013
Taiwan’s Formosa Plastics Group has agreed to invest $1.15 billion as part of a deal to buy nearly a third of a new iron ore project in Australia from partners Fortescue Metals Group and China’s Baoshan Iron & Steel.
Formosa, which is building a steel mill in Vietnam, will invest in the FMG Iron Ore Bridge project in Western Australia’s Pilbara iron ore belt, Fortescue said. The project is 88 percent owned by Fortescue and 12 percent by Baosteel.
The investment comes as increased purchases by Asian steel mills have helped drive spot iron ore prices .IO62-CNI=SI to their highest in five months.
Formosa will prepay $500 million to a Fortescue subsidiary, The Pilbara Infrastructure Pty Ltd (TPI), allowing it access to the Australian miner’s coveted Indian Ocean rail port facilities as part of the deal.