The Australian reported that Fortescue Metals Group Ltd. (ASX:FMG) has sold 50 percent of its stake in its Nullagine joint venture with BC Iron Ltd. (ASX:BCI) for US$199 million. The sale may indicate that Fortescue is close to restarting its Kings mine.
As quoted in the market news:
Fortescue will cut its 50 per cent interest in the Nullagine joint venture, in Western Australia’s Pilbara region, to 25 per cent, with BC lifting its stake to 75 per cent, after the two parties negotiated a deal to replace a 2009 agreement whereby Fortescue took half of the project to provide BC Iron with port and rail access.
BC will not only pay Fortescue $190m, it has also agreed to a price participation arrangement that means from next April 1 to September 30, 2014, BC will pay Fortescue if the average iron ore index price is more than $US120 a tonne in any given month.