Fortescue set to offload stake in rail, ports
Speaking in Hainan, Mr Power said there was strong interest in The Pilbara Infrastructure (TPI) business and, although it was not a "must deal" situation, Fortescue was hoping for a sale "to accelerate our debt pay down and move towards an investment-grade credit rating," he said. "By mid year we will get the process completed.
"The company would then look at completing 155 million tonnes a year of iron ore production."
Some analysts estimate the selldown of TPI could fetch as much as $5 billion depending on the structure of the deal, including whether the rail and port is opened up to other iron ore miners.
Mr Power said he was confident that the next two decades would be strong and iron ore prices over the next few years would remain above $110 a tonne. "It is hard to predict five years out, but for the foreseeable future nothing will shock or impact the price for some time," he said.
Fortescue aims to increase iron ore production to 155 million tonnes a year, with more than 90 per cent going to China. Mr Power said the urbanisation of China was a critical driver of the Chinese economy that required steel and iron ore.
He said Chinese President Xi Jinping made an encouraging speech at the Boao conference on Sunday, focused on lifting China out of poverty.
"President Xi's comments were reassuring in the underlying demand for steel in China for some decades to come," Mr Power said.
Frequently Asked Questions about this Article…
Fortescue Metals Group is planning to sell a stake in its rail and port business known as The Pilbara Infrastructure (TPI). TPI operates the rail and port assets that support Fortescue's iron ore operations in the Pilbara.
Fortescue's CEO Nev Power said the company is on track to announce the sale of a stake in its rail and port business by mid‑year, with the process expected to be completed around that time.
Fortescue says the sale is intended to accelerate debt paydown and help the company move toward an investment‑grade credit rating. The stake sale is described as a way to strengthen the balance sheet rather than a 'must deal.'
Some analysts estimate the selldown of TPI could fetch as much as $5 billion, although the final value will depend on the deal structure and details such as whether the rail and port are opened up to other iron ore miners.
The article states that whether the rail and port are opened to other iron ore miners is a factor that could affect deal value. Fortescue has not confirmed the final structure; analysts say opening access could influence the sale price.
Fortescue aims to increase iron ore production to 155 million tonnes a year. The company said it would then look at completing that 155 million tonnes per year production level.
CEO Nev Power said he was confident iron ore prices over the next few years would remain above $110 a tonne and described the next two decades as likely to be strong, while noting it's hard to predict further out.
Fortescue expects more than 90% of its iron ore to go to China. The company points to China's urbanisation and demand for steel as key drivers, and said remarks by President Xi Jinping at the Boao conference were reassuring for long‑term steel demand.
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