Fortescue shares smash $10 mark

May 27, 2008

May 27 (Business Day) – Shares in Fortescue Metals Group smashed through the $10 mark, propelling the wealth of Australia’s richest man Andrew ”Twiggy” Forrest beyond $10.2 billion.

Fortescue, which only shipped its first iron ore two weeks ago from the Pilbara, has a market value of about $28.5 billion, placing the miner behind BHP Billiton and Rio Tinto in Australia.

The company’s shares gained as much as 3.4%, or 34 cents, to $10.24 today, bringing this year’s gain to more than 35%.

Forrest, who owns 36.5% of Fortescue and is the company’s chief executive, overtook James Packer as the country’s richest man last year. His wealth may now be almost twice Packer’s, whose media and casino holdings have fared poorly this year.

Fortescue’s stock has climbed in recent days after Sinosteel confirmed it was in talks with institutional shareholder Harbringer Capital to take up to 8% of the company.

The discussions come after the resource company shipped its first load of commercial ore to China steelmaker Baosteel from its Port Hedland facility earlier this month.

Today’s share price compares with Fortescue’s all-time low in November 13, 2002, when it traded at just four-tenths of a cent. It now trades 2,500 times higher.

The West Australian company’s meteoric growth coincides with a sustained surge in global commodities prices, which has been underpinned by China and India’s rapid industrialisation.

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