Twiggy into coal?
FORTESCUE statement leaves door open to Bowen Basin.
Wednesday 01 March 2017
Iron ore miner Fortescue Metals Group says unsubstantiated claims in the US that they had made an “indicative” bid of more than $1 billion for the Curragh mine near Blackwater are “incorrect”.
“Fortescue Metals Group advises that media reports regarding the submission of an indicative bid for Wesfarmers Curragh coal mine assets on Monday 27 February 2017 are incorrect,” the company said in a carefully worded statement yesterday.
“We are focussed on debt repayment and capital flexibility, investment in the long term sustainability of our core iron ore assets, creating low-cost future growth options and delivery of returns to our shareholders.”
However, the way the statement is written hasn’t done anything to quell speculation that Fortescue is interested in investing in coal and sees Curragh as an excellent way to do it.
Technically, the “incorrect” component of the statement could just mean the bid was “real” not “indicative”, or that it didn't all happen on Monday.
Certainly, they are not the words most people would use to rule out an interest in buying a coal mine.
While Fortescue has been open about its plans to diversify out of its mainstay iron ore, it has never said that diversification would involve coking coal.
In fact, given coking coal is linked to the exact demand dynamics that iron ore is, it might not represent diversification at all.
However, on the other hand, they have an enormous understanding of the steel market and huge experience in running ultra low-cost bulk commodity mines.