Fortescue Metals Group

A$645m Strategic Placement to Hunan Valin Iron and Steel Group

April 2009

Azure Capital was appointed as a joint corporate adviser to Fortescue in late 2008.

In February 2009, Hunan Valin Iron and Steel Group Company (“Valin”) agreed to invest A$558 million in Fortescue at $2.48 per share for 225 million shares. Valin also agreed to acquire 275 million shares from an existing investor. In March 2009, Valin subscribed for an additional 35 million shares, raising a further A$87 million.

Fortescue also entered into a co-operation agreement with Valin. The agreement envisaged increasing iron ore sales to subsidiary Xiangtan Steel from the existing 1mtpa up to 4mtpa from 2010 onwards and endeavouring to negotiate a new agreement with Valin for up to an initial 1.4mtpa (increasing to a maximum of 6mtpa from 2013).

The placement was completed in April 2009 with Fortescue raising a total of A$645 million and Valin holding a 17.4% interest in Fortescue.