Baosteel receives first iron ore shipment from FMG

June 5, 2008

June 5th (Steel Guru) – Reuter reported that Baosteel Group hailed the first delivery of iron ore from Fortescue Metals Group Ltd recently and said it aimed to further boost cooperation with the Australian group. But officials gave no clear indication on the possibility of Baosteel taking a stake in Fortescue.

At a ceremony to mark the arrival of the first cargo from the Australian iron ore exporter, Mr Xu Lejiang chairman of Baosteel dodged the question of a possible investment in Fortescue saying this was dependent on other factors.

He said “It’s not up to me. It’s up to whether we can see eye to eye on a number of things, including common goals, development strategy and market positioning.”

Chinese business magazine Caijing reported earlier this month that Baosteel was in a slow waltz which aimed at taking a stake in Fortescue, but added that Chinese insistence on control had scuppered past deals.

Mr Andrew Forrest founder & CEO of Fortescue in Ningbo for Fortescue’s first shipment of iron ore to Baosteel Group said he would welcome Chinese investment. He said that “The Chinese industrial champion takes Fortescue very seriously and we will encourage its participation in the future of Fortescue.”

He added that “We have been in talks with the champions of Chinese industry for five years. We encourage Chinese industrial champions to participate in the future of Fortescue through joint ventures, shares, financing.”

Baosteel already has agreements to buy iron ore from Fortescue mines which opened this year and has long been rumoured as a potential investor in the Australian company.

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