Formosa Plastics closes $1billion dollar Australian iron ore project
Formosa Plastics Group of Taiwan has agreed to buy one third of an iron ore project from Fortescue Metals Group and China's Baoshan Iron and Steel for a USD1.15 billion dollar investment. The Iron Ore Bridge project in Pilbara is currently owned by Fortescue at 88 percent, while Baoshan owns the remaining 12 percent.
Formosa will initially invest USD500 billion to The Pilbara Infrastructure Pty Ltd to allow access to the coveted Australian miner's port facilities. The company will then be paying off the remaining USD123 million amounting to 31% acquisition.
The move to invest in the said project comes after a significant increase in iron prices in the last five months. This will help Fortescue pay up its accumulated USD10 billion debt after turning into the fourth top global iron ore exporter.
Construction for the Fortescue Metal Group's project is expected to be completed within a span of 12 months and begin production of 1.5 million tons of iron ore per year in 2015.