BOAO: Fortescue Metals, Australia's no. 3 iron ore producer, is looking to acquire coal assets to help develop its stronghold outside of iron ore, and is planning to list its magnetite assets in Hong Kong before the end of 2011.
Neville Power, Fortescue's chief operating officer, speaking on the sidelines of the Boao Economic Forum in southern China, said the Perth-based firm was also in talks with potential buyers from Asia and the Middle East to sell its magnetite assets.
"We don't see those magnetite assets being developed by our current balance sheet. We would consider everything from trade sale right through to IPO and listing, joint venture relationships," Power said.
Confirming the Australia-listed firm's plans to seek a dual listing in Hong Kong, Power said the financial hub would be the most likely option over Shanghai and it was not considering London or Toronto.
Australia is the world's biggest iron ore exporter, accounting for around 38 percent of global trade, but its output is dominated by global mining giants Rio Tinto and BHP Billiton.
Fortescue in February expressed its intention to bid for Mongolia's Tavan Tolgoi mine, the world's largest untapped coking coal deposit. But the firm was not among the final short-list announced in March, which includes global heavyweights ArcelorMittal, Vale and Xstrata.
Foreign miners and steelmakers have eagerly competed for the right to develop the mine in Mongolia, a frontier economy neighbouring booming China that sits on vast reserves of coal and copper.
"We have had a look at a number of different properties and a number of different opportunities, all over the place but we haven't found anything yet that we would see as a definite opportunity but we are certainly in the market looking," Power's said.
Some of the current prices for coal assets in the market were on the high side, said Power, adding that Fortescue was not desperate to make acquisitions, despite having ample funding sources. "We don't see raising capital as a major issue and again we look at all different funding options as we go forward, but certainly funding we don't see as a problem," he said. Fortescue is focused on developing its presence in the Asian market, and sees many advantages in having its secondary listing in Hong Kong, above other exchanges in the region.
"We would keep Shanghai in mind, but Hong Kong does appear to have quite an appetite for resource companies and has a highly liquid market."
Fortescue shares ended down 1.4 percent at A$6.48 on Friday, valuing the company at around A$20 billion.
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