Fortescue Metals Group chairman Andrew Forrest has spent nearly $39 million in two days increasing his shareholding in the mining company he founded, as its shares and iron ore prices plunge.Mr Forrest bought five million shares for $20.1 million at an average price of $4.02 on Monday.He spent another $18.5 million yesterday buying the same amount of shares at $3.70, in what is being seen as an attempt to prop up confidence.Investor anxiety about the company's massive debt level is rising as quickly as the iron ore price is falling. The commodity is the miner's only earner.The spot iron ore price fell four per cent to $US90.30 ($A87.64) a tonne overnight, according to The Steel Index.This is well below the $US120 ($A116) "price floor" that mining executives said the ore wouldn't drop below, as recently as a month ago.Mr Forrest's stake Fortescue now stands at 32.8 per cent and follows a $105 million purchase of shares over the course of more than a week in June.Fortescue is committed to a $9 billion expansion that is unprecedented in the Pilbara region of Western Australia. The expansion, which is largely debt funded, will nearly triple Fortescue's iron ore output to 155 tonnes a year by next June.Fortescue shares were trading at around three-year lows on Thursday, down three cents at $3.62 by 1553 AEST.The iron ore price is being pushed down by a range of China-related factors, including too much investment in steelmaking there creating an oversupply.China's economy and demand has slowed at the same time Australian producers, including Fortescue, BHP Billiton and Rio Tinto are increasing production.Fortescue is more vulnerable than its more diversified mining peers, with a falling iron ore price reducing the cashflow it needs to pay back debt, which is tipped to peak at no less than $10 billion.
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