PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has inked a nonbinding memorandum of understanding (MoU) with Brazilian major Vale, under which the two companies would form joint ventures (JVs) to blend iron-ore products.
The new blended product would be developed to suit the long-term needs of Chinese steel customers, and improve the efficiency of the supply chain to the steel industry, Fortescue said on Tuesday.
The agreement also provided a framework for potential investment by Vale in Fortescue through a minority acquisition of shares on market, or investment in current or future mining assets.
“The MoU will allow us to work together to deliver long-term value to our customers, through the efficient supply of an attractive and competitive new iron-ore blend in China,” said Fortescue CEO Nev Power.
The MoU was subject to an agreement on the final terms of any resulting transaction document, as well as any other required approvals including board approvals and regulatory approvals.
Western Australian Premier Colin Barnett has welcomed the development, saying on the sidelines of the Global Iron Ore and Steel Forecast that it was a positive transaction for Fortescue.
“As I understand it, they will be blending the iron-ore in China, and its an innovative idea and forms part of the market process. It will be good for Fortescue and good for iron-ore exports.”