FMG on track to sell port and rail stake

Fortescue Metals Group CEO Nev Power says the company is on track to sell a stake in its Pilbara port and rail assets by the middle of this year.

Fairfax Media reports Power told an audience in Hainan, China, the sale would help “… accelerate our debt pay-down and move toward an investment-grade credit rating”.

 

“By mid-year we will get the process completed,” he said.

 

The port and rail network is owned and operated by The Pilbara Infrastructure, a wholly owned subsidiary of FMG, and a selldown in the company could fetch Fortescue up to $5 billion.

 

The sale is part of a broader strategy by FMG reduce debt and lower operating costs as commodity prices soften.

 

Despite iron ore prices weakening over the last six months, Power said he remained confident demand from China would keep prices over $110 a tonne.

 

“It is hard to predict five years out, but for the foreseeable future nothing will shock or impact the price for some time,” he said.

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