Fortescue upbeat on debt

Miner says it will be comfortably repay debt without entering JVs or selling assets.

Fortescue Metals Group (FMG) says it's in a position to comfortably repay debt without having to do joint ventures or sell assets as the price of iron ore remains strong.

Chief executive Nev Power said Fortescue's decision to use debt to fund its rapid expansion had been vindicated as the Kings mine began producing iron ore two weeks ago.

"We're going to come out of this with 100% ownership of all our projects," Mr Power told reporters during a tour of the company's Solomon operations yesterday.

"Compare that to the other companies who are all in a joint venture of some form or another because of funding deals that have been done."

Fortescue, which has a $12 billion gross debt pile, was criticised last year for increasing its debt burden as the price of iron ore plummeted.

But, Mr Power, said the company's decision to restart the Kings mine would help it to repay debt very quickly.

"We're at the end of our capital expenditure program and production is ramping up," he said.

While he did not rule out selling a stake in the company's rail and port assets, he said it would have to be a very good deal.

There was no imperative to sell assets at this stage, he said.

"The iron ore price is very solid and we're in a strong position financially and all of those things go to say that we will need an increasingly better deal than what was offered to us in the past."

Mr Power reiterated Fortescue's target of reaching production capacity of 155 million tonnes per year by March 2014 and said the company expects the iron ore price to remain between $110 and $130 per annum over the next two years.

Chief financial officer Stephen Pearce said Fortescue aimed to repay around $4 billion to $5 billion in debt over the next few years to reach its desired gearing level.

"We've already done $1.2 billion, just about. You should expect to see us do the rest in a pretty short time."

Fortescue recently pledged to repay $US1.00 billion out of $US2.04 billion ($A1.10 billion out of $A2.24 billion) in senior unsecured notes in December.

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