Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
4Activity
0 of .
Results for:
No results containing your search query
P. 1
Fortescue Statement

Fortescue Statement

Ratings: (0)|Views: 268|Likes:
Published by peter_martin9335

More info:

Published by: peter_martin9335 on May 19, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

08/28/2013

pdf

text

original

 
 
Fortescue Metals Group Limited
 
ABN
57 002 594 872
ACN
002 594 872
ADDRESS
Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004
TEL
+61 8 6218 8888
FAX
+61 8 6218 8880
EMAIL
fmgl@fmgl.com.au
19 May 2010The Companies OfficerASX Limited2 The Esplanade,Perth, WA, 6000Dear Sir
Implications of the Proposed Resource Super Profits Tax
 
Solomon Hub >20,000 jobs – placed on hold
 
Western Hub >10,000 jobs – placed on hold
 
Chichester Hub expansion proceeding
Fortescue Metals Group (“ASX:FMG” “Fortescue”) wishes to advise that two of theCompany’s three expansion projects have been placed on hold due to the financialimpact of the Federal Government’s proposed Resource Super Profits Tax “RSPT”.The uncertainty in the financial markets caused by the proposed tax and the cashimpost that RSPT payments will place on future business revenues has necessitatedan urgent review of the economics surrounding the development of Fortescue’s majorprojects.A key focus within the review process is the funding implications of a proposedretrospective imposition of a cash drain on projects that were financed prior to theRSPT. Also, the implications for financing new projects within Fortescue’s projectpipeline will be reviewed and in particular clarification sought as to the Government’s“tax guarantee” for 40% of project losses in the event of bankruptcy. This initiative hasbeen proposed by the Federal Government as an incentive for projects to proceeddespite the tax however it is considered of no lending value by project financiers.Therefore the financial modeling of any future development must account for the 40%cash flow leakage without any compensatory benefit under the RSPT.In reviewing Fortescue’s pipeline of planned expansion opportunities, the three keyareas are: 1) the development of the Solomon Hub; 2) the development of the WesternHub; and 3) the completion of the development of the Chichester Hub.
Solomon Hub: US$9 billion proposed investment with 6,000 people employedin operations and 15,000 through construction.
Fortescue’s planned development of its flagship 160 million tonnes per annum (Mtpa)project known as the Solomon Hub is to be placed on hold until the finance impact ofthe RSPT can be fully determined.This project has been four years in development and includes the development of theproposed new Pilbara Port at Anketell Point. To develop Solomon, Fortescue hadplanned to establish a debt funded capital platform utilising equity derived from thecash flow from the company’s Chichester Hub. This financing plan will be severelyimpacted as a result of the new tax impost.Until the financial position is certain, the only work to continue on the Solomon Hub willbe the completion of existing studies.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->