Fortescue Metals Group Ltd. confirmed reports that its planned partnership with Brazilian miner Vale SA to blend their respective iron ore products for Chinese steelmakers is unlikely to proceed after the companies failed to agree on the deal's commercial terms.
"Negotiations are continuing between the parties on an amicable and commercial basis, however, it is looking less likely that any transaction will be completed," according to a Dec. 19 statement.
Meanwhile, The Australian Financial Review wrote that the Australian iron ore major is now looking for other companies it can partner with to blend its Pilbara ore, while the company continues blending ore internally to serve customer needs.
Both iron ore miners signed a nonbinding memorandum of understanding in March to blend their iron ore product for the Chinese markets.
The deal would have seen the two companies blending between 80 million tonnes and 100 million tonnes of their respective iron ore each year in a facility in China.
S&P Global Ratings raised the issuer credit rating on Fortescue to BB+ from BB on the back of a further reduction in absolute debt.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.