China Not Likely to Invest in Australian Iron Ore Mining Until Prices Improve – Fortescue

Mining Weekly reported that Fortescue Metals (ASX:FMG) CEO Nev Power said that Chinese investment in iron ore mining in Australia likely won’t happen until prices improve.
As quoted in the market news:

Fortescue went from scratch seven years ago to the world’s fourth-biggest iron ore miner with support from Chinese steel mills eager to spread raw material sources beyond Australia’s established producers Rio Tinto and BHP Billiton .
“There is probably a point in the iron ore market where the price starts to go up again, and that’s when there will be interest in investing back upstream in the supply chain,” Power told Reuters on a tour of the company’s Christmas Creek mine in Australia’s Pilbara iron ore belt.
Analysts predict it could be years, if ever, that iron-ore revisits boom-years highs approaching $200/t after a surge in mine construction turned a supply deficit into a glut. Iron-ore was selling for $45/t on Monday. Fortescue, which has $6.6-billion in net debt, has been open about entertaining approaches from Chinese investors for its port and rail business, but was no longer pursuing outside investment, Power said. ”
With prices so low, China’s interest in iron ore has all but dried up, so it’s understandable,” said Morgans Financial analyst James Wilson. “Apparently even so for Fortescue’s rail business, which is very profitable.” Hunan Valin Iron and Steel, China’s second biggest steel manufacturer, holds 14.7% of Fortescue’s stock.

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