Harbinger bullish on metals' future
PHILIP Falcone, who heads the $US23 billion ($A24 billion) US hedge fund Harbinger Capital Partners, has declared he remains bullish on commodities.
PHILIP Falcone, who heads the $US23 billion ($A24 billion) US hedge fund Harbinger Capital Partners, has declared he remains bullish on commodities.Harbinger is a major investor in Fortescue Metals, Murchison Metals, Midwest, Moly Mines and Poseidon Nickel.Mr Falcone said he believed that while demand and pricing of metals was volatile, it would over time continue to go higher."I like the prospect of commodities on general supply/demand factors," he told BusinessDay in a rare interview yesterday, refuting a US report that said he believed the cycle had peaked.Amid speculation he has been looking to offload his 15.85% stake in Fortescue, worth $3.6 billion, Mr Falcone said he had been approached with many offers but had not yet decided whether to sell any shares."If I make a decision, it will clearly not be my entire position that I am parting with," he said. "I think the stock is very undervalued. We like the prospects for the company."Despite his bullish outlook for commodities, Mr Falcone said he did not own shares in BHP Billiton or Rio Tinto. "I think they are both attractive companies, but I think the growth prospects are tremendous for Fortescue," he said. "I don't see that kind of growth for BHP or Rio."Mr Falcone said the "real risk" once associated with Fortescue had ended once it successfully started production in May."They have proven they can actually produce," he said. "From zero to 1 million tonnes is more risky than from 1 million to 150 million."He said Fortescue chief executive Andrew Forrest's bold personality rather than the bureaucracy of larger companies had been needed to get its $3.7billion project off the ground.Harbinger recently accumulated a 16.2% stake in iron ore miner Midwest, controlled by Chinese metals trader Sinosteel. Sinosteel's takeover offer remains open, but Mr Falcone said he would not tender into the bid, but would consider different options. "There's a lot that (Sinosteel) can't do because of our position," he said.Despite his large holding in several Australian companies, Mr Falcone said he had not visited the country recently.
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