Fortescue Metals has reached an agreement in its shipping dispute with Classic Maritime over three suspended contracts of affreightment, company secretary Rod Campbell said in a statement.
“Fortescue Metals Group is pleased to announce it has reached agreement to settle its shipping dispute with Classic Maritime,” he said.
Classic will terminate its arbitration with Fortescue, which was set to begin in London next month.
The agreement will see Fortescue pay Classic an upfront fee of US$25.35 million and then US$0.99 per tonne over 21.93 million tonnes shipped over a period of two and a half years.
The company will also restructure its future cargo obligations and extend the contracted term with Classic from five to 11 years ending in 2020, while the number of contracted shipments will increase progressively over the term from four per month in 2010 rising to eight per month to 2020.
Campbell said that with the Classic Maritime dispute now settled, Fortescue will turn its attention to its five remaining suspended shipping contracts.
“Proceedings are continuing in the UK with the next arbitration scheduled for September 2009,” he said.
“Fortescue continues to vigorously defend these actions.”