Shares in Fortescue Metals Group have surged 21 per cent amid speculation that Chinese interests could have the Pilbara iron ore miner in their sights.
Shares in Fortescue Metals Group have surged 21 per cent amid speculation that Chinese interests could have the Pilbara iron ore miner in their sights.
Shares in Fortescue Metals Group have surged 21 per cent amid speculation that Chinese interests could have the Pilbara iron ore miner in their sights.
FMG shares jumped from $3.59 yesterday to close at their high for the day of $4.35 per share, its highest point in eight months.
The volume of shares traded continued to surpass the company's average.
In a response to an Australian Securities Exchange query, FMG said it had no information on the share price spike.
The miner has experienced a high share volume turnover since Friday when Rio Tinto announced its $US19.5 billion deal with Chinalco was called off.
On the same day, Rio announced a merger proposal with BHP Billiton's Western Australian iron ore assets, in a bid to unlock synergies of at least $US10 billion.
On that day, 34.17 million shares were traded and the company's share price jumped 14 per cent to $3.18.
The termination of the Chinalco deal has fuelled speculation by analysts and market observers that iron ore-hungry China may have to look elsewhere to invest, with FMG the next likely target.
President of the Australian China Business Council Duncan Calder told WA Business News the collapse of the Chinalco deal could prompt China to look at other alternatives in order to lock in iron ore supply.
He added that although China may be disappointed, it was not "going to spit the dummy and walk away from Australia."
"... China needs resources and Australia is a low cost, politically secure, competitive source for iron ore with whom there are strong sound and political connections," Mr Calder said.
China already has an interest in FMG, with Hunan Valin Iron and Steel Group Company holding a 17 per cent stake in the miner.
Shares in other Pilbara iron ore plays have risen strongly today with BC Iron closing up 18 cents to $1.18, Brockman Resources up 10 per cent to $1.28 and Aquila Resources, which received a speeding ticket from the ASX, jumped $1 to close at $6.
Aquila said it was not aware of any information that could have prompted the share price surge.