04/06/2008 - 22:00

Forrest joins inner circle

04/06/2008 - 22:00

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The market may be tired of hearing about Andrew Forrest's ever-growing paper fortune, but the continuing rise of Fortescue Metals Group Ltd is astounding.

The market may be tired of hearing about Andrew Forrest's ever-growing paper fortune, but the continuing rise of Fortescue Metals Group Ltd is astounding.

By close of play on Tuesday, FMG's share price had risen to $11.74 a share, a fact that is usually recorded in terms of Mr Forrest's wealth which is calculated by basically multiplying that number by 1 billion.

But that ignores the overall market capitalisation of FMG, which has entered the ranks of Australia's top companies, almost equalling Woolworths Ltd and butting up against the banks.

While the commodities boom that has fuelled FMG is also pumping up the value of corporate combatants Rio Tinto Ltd and BHP Billiton Ltd, the upstart company from East Perth has significantly closed the distance in terms of valuations.

On Tuesday, the market valued FMG at more than 20 per cent of BHP and around half of Rio, adding hugely to the weighting of mining stocks on all the indexes.

It has left stocks like Wesfarmers Ltd, QBE Ltd and CSL Ltd in its iron-ore created dust.

But let's not ignore the impact of this event on the stock-driven wealth of Mr Forrest, currently the nation's richest person. The China fuelled boom in iron ore prices has placed Mr Forrest in the top 60 in terms of the world's richest people, according to Forbes magazine.

Comparing to the UK, he would sit at number six on the list compiled by The Times, helped by the strength of the Australian currency which performed strongly against both the US and the pound.

Ironically, the UK billionaire that Mr Forrest is closest to is steel and minerals magnate Alisher Usmanov, whose fortune is built around Russian-based Metalloinvest.

Mr Usmanov's name raised eyebrows here earlier this year when interests linked to him were involved in a controversial deal to sell a stake in Mt Gibson Iron Ltd to China-based Shougang Group.

Of course, others in this rare stratosphere of UK rich are also in the steel business like Roman Abramovich and the UK's richest, the Mittal family.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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