Fortescue Metals Group (FMG)

Shares / Stock Code

FMG

Stock Exchange / Sharemarket

Australian Securities Exchange

Fortescue Metals Group (FMG) is an iron ore explration company which owns significant iron-ore resources and it is a provider of necessary infrastructure. FMG listed on ASX on 19th of March 1987. During the fiscal year ended June 30, 2007, the company had been exclusively focused on the development of the Chichester Range project situated in the Pilbara region of WA. This project encompasses the construction of a $550M mining and processing facility, a 520km $830M railway system and a $470M port in the Pilbara region of Western Australia. Since July 2003 the company’s total tenement holdings have increased up to approximately 40,000sqkm. During the fiscal 2006, Fortescue operated through two business divisions: exploration, evaluation and development of mineral resources, and marketing and wholesaling of medical products all over the Australia and New Zealand. The demerger of this business happened in November 2005.

In February 2006, FMG started the development of Fortescue's port, rail and mine project with the turning of the first sod at the Company's port site at Anderson Point in Port Hedland. Just after two years, the company has completed the open-access rail infrastructure, with its Fortescue Herb Elliott Port operational as well as its mining operations in progress at Cloudbreak, the Company’s first minesite. FMG commenced shipping on 15 May of 2008, with the completion of project within months. On the 19th of July, Fortescue's successfully mined, railed and shipped at a rate of 24mtpa for a one month period. This achievement took place in line with the detailed business plan for its Pilbara Project.

Fortescue Metals Group History

In 2003, The Metal Group Pty Ltd, the Company's majority shareholder, took over Allied Mining & Processing. Soon after Allied Mining and Processing's was renamed to Fortescue Metals Group and the company entered into the iron ore infrastructure industry.The Company’s major milestones are discussed below.

In May 2003, FMG acquired first Cloudbreak tenements with subsequent Cloudbreak tenements acquired later in November 2003. In October 2004, Fortescue entered into the Iron ore sales agreement with Hebei Wenfeng and with Ping Xiang Iron & Steel. It signed Infrastructure State Agreement in November 2004. FMG raised A$70 million through convertible note issue as of January 2005. In February 2005, the company made a significant discovery of iron ore mineralisation in the Cloudbreak project area. In October 2005, FMG signed sales agreements representing 38% of initial planned production of 45 Mt/a. It also commenced trial mining at Cloudbreak deposit. In Dec 2005, it signed Mining State Agreement - Environmental Stage B and began earth works at port site in Feb 2006.

In Jul 2006, it signed a Subscription Agreement with Leucadia National Corporation. In August 2006, FMG settled an A$3.2 billion capital raising and $2.7 billion debt underwriting. It presented detailed proposals for Port and Rail Special Licence Issue and began railway construction in Nov 2006. In Dec 2006 FMG presented detailed proposals for Mining Approval and the company signed WISCO Offtake agreement. It signed Iron ore sales agreement with Baosteel and a contract for 100% of initial 45 Mt/a in March 2007. In May 2007, FMGL joined MSCI Index and the company signed Iron ore sales agreement with Tangshan and entered into Fengli Agreement. It raised $504,000,000 institutional equity placement in July 2007 and joined S&P/ASX 100 index in August 2007. It opened China Office and commenced mining at Cloudbreak in Oct 2007.

In Nov 2007, Fortescue declared an Inferred Resource estimate of 1.014 billion tonnes (56% Fe) for the Serenity Area of Solomon. This was subsequently upgraded to comprise a additional 700 million tonnes (56% Fe) of Inferred Resource for the Solomon East Project area. In Mar 2008, the company joined the S&P ASX 50 and it accomplished the construction of the Cloudbreak to Port Hedland Railway in April 2008.In May 2008, FMG's first shipment of ore loaded at its Herb Elliott Port with the project completion achieved in July 2008.

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