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Fortescue Metals Group CEO Andrew Forrest iron ore price may rise

By Steve Gavriliuc for CEOWORLD Magazine Updated:November 12, 2009

Fortescue Metals Group Ltd. (ASX:FMG) (FMG.AU) Chief Executive Andrew Forrest said Thursday demand for iron ore is increasing and that he expects spot prices to rise.

“We are taking more calls from potential customers than during the 2008-09 peak. Everyone is looking for iron ore. Spot prices will continue to firm,” Forrest said in a speech at the Sydney Mining Club.

“We have a large group of players who are happy to support Fortescue and that is a good time to go to the Australian banks and give them the opportunity to back another Australian.”

The Pilbara miner had attempted to strike a $US6bn deal with China, but that failed when the economic powerhouse did not offer terms acceptable to the company, forcing Fortescue to look internally to fund its ambitious expansion plans.

Mr Forrest would not comment if he was still in talks with China about potential future funding, and instead reiterated the company had chosen to take a different path.

“I really wanted Fortescue to take some breathing space and we put a fair bit of leadership energy into that and I really want that leadership energy to … make the two projects sing,’” he said.

“All the energy is on internal funding.”

Mr Forrest also said he expected spot prices to rise, and that the miner was now taking more calls from potential customers than during the 2008-09 peak.

in another news, Fortescue Metals Group Ltd will decide in 2010/11 whether to mine its Solomon iron ore project in Western Australia and estimates the development will cost $3.6 billion.

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