US hedge fund enters iron ore battle

May 29, 2008

May 29 (ABC News) – A United State’s hedge fund has placed itself in a powerful position to help determine the outcome of the battle to develop Western Australia’s Midwest into a world class iron ore producing region.

US hedge fund owner Phil Falcone has bought eight per cent of Midwest Corporation after the company announced it was supporting a merger with its iron ore rival Murchison Metals.

Midwest Corporation is also the subject of a $1.3 billion bid by its other major shareholder Sinosteel.

Mr Falcone’s fund Harbinger already owns nearly 19 percent of Murchison, and if he votes Murchison’s way the two will have sufficient votes to block Sinosteel’s offer.

Mr Falcone is a friend of Australia’s richest man Andrew Forrest and owns almost 16 per cent of his company Fortescue Metals Group.

He also owns large holdings in other WA resource projects including Moly Mines and Compass Resources.

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