An investment company out of the US has taken a 5 per cent stake in Fortescue Metals Group.
The Capital Group, which holds around $1.2 trillion in funds under management, revealed it had spent the last four months buying into FMG.
At current prices, the total value of its stake is $392.3 million.
FMG chairman Andrew Forrest is the company’s biggest shareholder with a 33.3 per cent stake while China’s Hunan Valin Iron & Steel holds 14.7 per cent.
The spend by Capital Group came at the same time FMG shares fell to their lowest prices since 2009.
The price slide was in line with the crash iron ore has seen this year, tumbling 16 per cent since January to $US62.58 a tonne.
FMG is working to cut its cash costs, saving 11 per cent in the last quarter to come in at US$28.48 per wet metric tonne (wmt).
Fortescue’s total delivered cost to customers has further decreased to US$41/wmt inclusive of C1 cost and shipping, royalty and administration costs, nine per cent lower than the prior quarter.
Figures released by the Pilbara miner last week also showed a strong production performance, with 41.1 million tonnes of iron ore shipped, a 47 per cent increase on the prior comparable period.
Fortescue mined 43.6mt of ore during the quarter, two per cent higher than the previous quarter and 36 per cent higher than the prior comparable period.
While other iron ore miners have flagged multi-million dollar writedowns due to the low price of iron ore, FMG said it did not expect to writedown the value of any of its assets when it released its half-year financial statement in the coming weeks.
Life for iron miners is expected to get much worse this year, with bearish predictions today that the price of iron ore could fall to lows of $US30 a tonne.
According to Andy Xie, an independent economist, a contracting steel manufacturing industry in China will lead to oversupply as the big three miners – BHP Billiton, Rio Tinto and Vale- pump out record volumes of ore into a flooded market.