Fortescue share price edges higher on ‘potentially massive’ news

The Fortescue Metals Group Limited (ASX: FMG) share price is edging higher on Wednesday, up 0.86%.

The S&P/ASX 200 Index (ASX: XJO) iron ore miner closed yesterday trading for $22.05 per share with shares currently changing hands for $22.24 apiece.

Here’s what’s drawing ASX 200 investor interest today.

What’s drawing ASX 200 investor interest?

The Fortescue share price is well into the green after the miner reported it has signed the Mining Convention for its Belinga Iron Ore Project with the Gabonese Republic.

The Mining Convention for the 4,500 square kilometre project, located in Gabon, was signed via Fortescue’s incorporated joint venture company, Ivindo Iron SA. The Gabonese government has a 10% interest in the JV, with Fortescue holding 72%. The Africa Transformation and Industrialization Fund hold the other 18%.

The convention covers all the regulatory requirements for the project. That includes early development for the production of up to two million tonnes of iron ore per year while the JV partnership works towards large-scale development.

First mining is just around the corner, planned for the second half of the 2023 calendar year.

Fortescue founder Andrew Forrest said this will offer growth opportunities for Fortescue Metals and Fortescue Future Industries (FFI) throughout the African continent.

Commenting on the development sending the Fortescue share price higher today, Forrest said:

The Gabonese Republic chose Fortescue to develop Belinga not only due to our strong track record of delivering major projects, but due also to our company wide commitment to use our major industrial scale and expertise to assist heavy industry combat climate change.

Forrest also pointed to the huge potential of the Belinga project.

“Geological mapping and sampling programs have confirmed our initial thoughts that this new West African iron ore hub may well one day prove to be among the largest in the world,” he said.

“This emerging iron region is potentially massive,” Forrest added. “If it fulfils its promise, it will complement our Australian operations through enhancing our blended products, extending our mine lives and opening new global markets.”

Fortescue forecasts costs of around US$200 million (AU$314 million) for the early stage mining development with investment over calendar years 2023-2024.

Fortescue share price snapshot

The Fortescue share price has enjoyed a strong start to the new year.

As you can see in the chart below, with today’s intraday gains factored in, shares are up 9% in 2023.

The post Fortescue share price edges higher on ‘potentially massive’ news appeared first on The Motley Fool Australia.

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More reading

• Is the 9%+ Fortescue dividend yield safe for passive income investors?
• Why are ASX 200 iron ore shares being hammered hard on Friday?
• Why are ASX 200 iron ore shares like Rio Tinto sliding lower today?
• Here’s the Fortescue dividend forecast through to 2025
• Will funding FFI drag the Fortescue share price lower?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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