Fortescue made to pay royalties as it pushes through expansion plan
Fortescue Metals Group (ASX:FMG) has seen its request to postpone the payment of more than AUD$200 million in royalties rejected by the West Australian government as it conto continues to pursue ambition expansion plans.
The Australian Financial Review (paywall) reports that the pure iron ore player's bid for payment deferral was rejected by both the office for WA Mines and Petroleum Minister Norman Moore.
"Minister Moore's office has confirmed that no royalty relief has been offered to the company and the request has been declined," said a spokeswoman for the minister's office.
The Australian iron ore giant has weathered tough times this year, facing plunging iron ore prices and ailing demand in the key export market of China.
Despite recent hardships Fortescue continues to push through with ambitious development plans, with the West Australian reporting that the company is offering prepayment deals to customers in order to shore up capital for expansion.
Fortescue has reportedly offered a number of existing customers and major trading houses prepayment deals in order to obtain USD$100-300 million for the purpose of putting construction of the $1.1 billion Kings mine back on schedule.
A Fortescue spokeswoman says the counter-parties have been receptive, with "exceptionally strong interest from customers who are keen to secure long term supply arrangements."