Australia's Fortescue Metals Group (FMG), the world's fourth largest iron ore producer, plans to sell its infrastructure assets to Chinese investors in order to shore up its financial position, the China Business News (CBN) reported Tuesday.
"Falling iron ore prices have had a major impact on FMG's bottom line," Zhang Jiabin, an analyst with steel industry portal umetal.com, told the Global Times Tuesday.
FMG has gradually grown more dependent on China as a market for its iron ore. FMG exported nearly 60 million tons of iron ore to China in 2012, when it expanded production to cope with the country's growing appetite. This year it is estimated that FMG will export 100 million tons of iron ore to China.
"But Chinese demand for iron ore is slowing, which is pushing down prices," Zhang explained.
FMG has tried to enter negotiations with several Chinese steel mills with which it has signed pre-sale contracts, although so far all refused to engage FMG on the subject, the CBN reported.
China's Hunan Valin Iron & Steel Group purchased a 17.43 percent stake in FMG in 2009, a deal which made it FMG's second largest shareholder.
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