Baosteel eyes investment in Fortescue

Baoshan Iron & Steel (Baosteel) said it will invest in Australian iron ore supplier Fortescue Metals if the Perth-based company proceeds with expansion plans to become the country’s third-largest iron ore supplier, Bloomberg reported. Baosteel chairman Xu Lejiang spoke of the potential investment in Shanghai, where his firm receieved its first shipment of iron ore from Fortescue. Xu gave no details as to the time frame for the investment or its potential value. Baosteel, China’s largest steelmaker, has spent more than US$14 billion buying stakes in mining assets worldwide. It is said to be looking for ways to diversify its iron ore supply and become less dependent on Rio Tinto and BHP Billiton. Fortescue has signed long-term contracts to provide iron ore to 33 Chinese mills for at least 10 years. Earlier this week, Sinosteel said it was in talks with Fortescue to buy an 8% stake in the miner.