Fortescue signs multi-billion-dollar agreements with Chinese

Image: Fortescue Metals Group.

Fortescue Metals Group has secured 12 new agreements with Chinese steel mills, procurement partners and financial institutions during the China International Import Expo 2020.

The 12 memoranda of understanding (MoU) are valued at around $US3-4 billion ($4.1-$5.5 billion).

Fortescue signed an MoU for supply and procurement of its iron ore with long-term partner and major shareholder Hunan Valin Iron & Steel Group Co.

For strategic cooperation, it also signed an MoU with the Bank of China in Sydney.

According to Fortescue chief executive Elizabeth Gaines, the company’s economic success in Australia is attributed to China.

“Since the company’s inception, Fortescue has built enduring relationships with our stakeholders in China. Our engagement extends beyond iron ore supply to longstanding customer relations, procurement and financing arrangements as well as academic, policy and social linkages,” Gaines said.

“Fortescue’s success and that of the Australian economy has been built on the great powerhouse that is China. Now, more than ever, these strong trade relationships provide economic stability as we work together to build new opportunities for the future.”

Gaines said iron ore demand was an important factor in Australia’s economic growth, with the MoUs reinforcing Fortescue’s exports to China.

She added that China’s steel industry continued to outperform expectations, with crude steel production in the nine months to September reaching 782 million tonnes, with annual steel production expected to exceed one billion tonnes this year.

“We are proud to sign MoUs with Valin Group, the Bank of China, steel mills and other procurement partners, demonstrating the breadth and depth of our relationships in China,” Gaines said.

“Through this multifaceted approach, Fortescue has forged strong partnerships with customers and businesses in China that have significantly contributed to China’s remarkable urbanisation and development and our company’s contribution to the economic prosperity of Australia and Western Australia.”

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