Ore and More

Reuters: Three Chinese groups eye Fortescue iron ore stake

Congrats to Andrew Forrest, Australia’s richest man, on shipping the first ore, and to Harbinger Capital Partners on their possible sale of 16% of Fortescue to the Chinese. The fact is this was a brilliant investment in its timing all the way around, and a real home run. One of the things that it has proven to me is how powerful a charismatic CEO can be; Forrest pushed this through when everyone, including me, doubted. At this point he has some real value: a port, a rail line, and some ore bodies. He now gets the issues of growing the project to justify the market cap, but he could go off into the sunset with a sale of his stake on top of Harbinger’s stake and declare it a win. It sure would be interesting to see Fortescue 49% owned by the Chinese, and it would really mess with the oligopoly.