Fortescue reveals $500m share buyback program

Fortescue plans to launch an on-market share buy-back program of up to $500 million.

The program will commence after the release of its quarterly report on October 25, and will remain in place for 12 months.

Fortescue chief executive Elizabeth Gaines said the program was consistent with the company’s strategy to invest in its core iron ore business.

“The share buy-back program is a natural extension of our capital allocation focus which has now clearly shifted from debt reduction,” she said.

“With our continued strong operating performance and new investments underway, the purchase of our own shares, funded out of operating cash flows, maintains our disciplined balance sheet management.”

No shareholder approval is required for Fortescue’s buy-back program, the company said in an ASX statement.

Similarly, Rio Tinto said it would return $US3.2 billion ($4.4 billion) from its coal mines sale proceeds to the shareholders last month.