Fortescue Metals is pushing ahead with the sale of a minority stake in its rail and port infrastructure, despite favourable conditions helping the iron ore miner to pay down its debt.


Fortescue recently put back a decision on the potential sale by three months to the end of September.

The iron ore miner raised the prospect of a partial sale as part of measures to address its debts levels.

But chief executive Nev Power said there was no real deadline for making the decision, as the company came closer to completing its capital expansion.

“We set that as a bit of an expectation, saying that’s when we expected things might finalise and that process is continuing,” Mr Power told the Diggers and Dealers mining conference.

“We’re working through the people that have expressed an interest on that.”

He said it was a relatively complex transaction, and the company wanted to make sure the assets could be operated efficiently and expanded to meet future needs.

“We’ve continued to look to improve our cash flow from operations and reducing costs,” Mr Power said.

“A higher than predicted iron ore price … a softening Australian dollar, the prepayments that we’ve been able to transact and other non-core asset sales have all contributed to the improvement in our cash position and they all add to our ability to repay that debt sooner.

“I don’t think it’s necessary to prioritise one before the other but we’re continuing to work on all of those options.”

Mr Power also said the Fortescue board was considering options to pay off debt more rapidly to improve the balance sheet.

Fortescue expects to reduce its capital expenditure from $6.2 billion in 2013 to less than $2 billion next year.

Mr Power reiterated that the company was on track to produce 155 million tonnes of iron ore by the end of the year.

He also lashed out at naysayers who are worried about a slowdown in China.

“I’ve never seen so many people negative on China that have never been there or never really studied it,” he said.

“China is a phenomenal economy.”

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