Abstract: According to the agreement, Formosa Plastics Group invested 1.23. The company acquired a 31% stake in the Iron Bridge JV for hundreds of millions of U.S. dollars and provided $527 million in funding for the project’s first-phase development. Meanwhile, Formosa Plastics Group will also participate in the project’s second-phase construction and will purchase 3 million tons of iron ore annually from the project at market prices.

[Li Yan, a reporter for Caijing Magazine] FMG, Australia’s third-largest iron ore producer, which had previously been caught up in a debt default controversy, (Fortescue Metals Group) has finally secured a new investor for its assets. On the 16th, the company announced that Taiwan’s largest private enterprise, Formosa Plastics Group, will invest US$1.15 billion in FMG Iron Bridge Joint Venture (hereinafter referred to as Iron Bridge JV) to develop this iron ore project.
According to the agreement, Formosa Plastics Group will invest US$123 million to acquire a 31% stake in Iron Bridge JV and provide US$527 million in funding for the project’s Phase I development. At the same time, Formosa Plastics Group will also participate in the project’s Phase II construction and will purchase 3 million tons of iron ore annually from the project at market prices.
In addition, Formosa Plastics Group will make an advance payment of US$500 million to FMG Pilbara Infrastructure Company in exchange for the right to use the latter’s Herb Elliott Port.
The weakness in the commodity markets has prompted major global mining companies either to divest non-core assets or to seek strategic partners. To ease debt pressures, FMG formed a joint venture called Iron Bridge JV with Baosteel last June, aiming to explore and develop FMG’s Iron Bridge Project. The two parties hold 88% and 12% of the joint venture’s shares, respectively. The company owns two world-class iron ore deposits—North Star and Glacier Valley—located approximately 100 kilometers from Port Hedland in Western Australia, with total reserves reaching 5.2 billion tons.
The Phase I of the Iron Bridge Project has an annual production capacity of 1.5 million tons of hematite and is expected to begin operations in early 2015. The Phase II project, with an annual production capacity of 9.5 million tons of magnetite, will commence operations depending on the approval process and engineering progress agreed upon by both parties.
Taiplast Group’s latest investment is aimed at addressing the raw material supply issue for its steel plant in Ha Tinh Province, Vietnam. The company is currently constructing a comprehensive steel plant in Vietnam with an annual production capacity of 22 million tons. The first phase will include three blast furnaces, with a total ironmaking capacity of 10.5 million tons, and is expected to begin operations as early as mid-2015. The second phase will add another three blast furnaces, bringing the plant’s total annual capacity to 12 million tons. Upon completion of the second phase, the plant will be capable of producing billets, hot-rolled coil, wire rod, and rebar. It is anticipated that cold-rolling and galvanizing production lines will also be added in the future, though the specific timing has yet to be determined.
FMG stated that this transaction is still subject to approval by the Australian Foreign Investment Review Board and the Taiwan Investment Commission, and the outcome is expected in September.

This website reports: Our company has been closely following the FMG Iron Bridge Project for the past two years. 2012 Last year, entrusted by Baosteel Resources Co., Ltd., our company organized an international team to conduct an assessment of the North Star and Glacier Valley projects, which attracted considerable attention from the Australian mining industry. For more information, please refer to the “Zhiyuan Dynamics” section of our website, specifically the September 2012 issue. Our company has been invited to attend the special seminar convened by Baosteel Resources Co., Ltd. The report of “”.