Fortescue Metals Group Ltd. CEO Nev Power said things look rough for the company's proposed iron ore blending joint venture with Vale SA, The Australian reported.
Power noted that Vale has been successful in blending its own ores, and that a cancellation of the deal will not prove to be an issue for Fortescue.
"We're still in discussions with Vale, but I think it is looking less and less likely we are going to be able to do that transaction, which I think is a real shame," Power said.
According to Paul Bartholomew, senior managing editor, Australia for S&P Global Platts, the blended product from the Fortescue and Vale partnership is unlikely to be favored by Chinese steel mills.
BHP Billiton Group's and Rio Tinto's iron ore supply relationship with China is too established for the Fortescue-Vale product to displace any tonnes, Bartholomew told a conference in July.
Fortescue recently outlined plans to pay off another US$1.0 billion worth of debt this month, which will decrease its annual interest payments by about US$38 million.
S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.