<span class="" id="parent-fieldname-description"> Announcing its FY13 second quarter results Fortescue Metal Group (FMG) confirmed that a process to consider the sale of a minority interest in its rail and port assets had commenced, with strong interest received from a number of strategic and financial parties. </span> <p>The possibility of such a sale was raised on more than one occasion during the second half of 2012 when low iron ore prices created potential liquidity problems for FMG and the company was forced to dramatically scale back its expansion plans.</p><p>At the time FMG had indicated that while no sale process had commenced it was not averse to the idea though indicating it would only seek a minority shareholder in the assets.</p><p>Bloomberg reports that FMG has hired Lazard Ltd and Macquarie Group Ltd as financial advisers on any potential sale.</p><p>“We’ve had very, very strong interest and we’ve begun the process of engaging with the selected proponents to work through the details,” FMG CEO Neville Power told reporters on conference call.</p><p>“We would expect to have a short listing of that in the next four weeks or five weeks or so and then we’ll give an update.”</p><p>Bloomberg cites a report from Michael Evans, a Sydney-based analyst at CIMB Securities (Australia) Ltd, which suggests the company may sell as much as 40% of the assets for as much as $4 billion.</p><p>Meanwhile FMG reported that in the three months to December it shipped 19.1 million tonnes of iron ore, a 32% increase on the previous corresponding quarter and a 24% increase on the September quarter.</p><p>Work has restarted on the stalled Kings deposit with the current development program expected to see the project completed in the December 2013 quarter, lifting Fortescue’s annualised production to 155 million tonnes per annum.</p><p><strong>Rail expansion back on track</strong></p><p>FMG currently has committed contracts valued at US$2.2bn in place for new rail lines and capacity upgrades.</p><p>Duplication of the existing mainline will provide rail capacity to 155mtpa and all formation work has been completed with approximately 120km of rail laid to date. Of the 57 turnouts, 48 have been installed on the mainline with the outstanding turnouts scheduled within operational windows. All rail and sleepers have been delivered and ballast production continues to remain well ahead of the track laying contractor requirements.</p><p>The 130km long Fortescue Hamersley Line ran the first production train from the Solomon mine on 1 December 2012.</p><p>Signalling works have continued along the mainline with additional sites commissioned in December 2012. Completion of the mainline wayside signalling is scheduled for the June 2013 quarter. Final commissioning of the Positive Train Control system will commence at the end the of June quarter 2013 with a controlled roll out throughout the September 2013 quarter.</p><p>During the FY13 second quarter FMG took delivery and commissioned eight locomotives, 1,478 ore wagons, 18 fuel tank cars, five pairs of compressor cars and 12 ballast cars. An additional 11 locomotives have been delivered and are currently being commissioned. A further two locomotives and 528 ore cars are to be delivered during the March 2013 quarter.</p>
