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FMG in the news that they may raise $4bn from the sale of a minority interest in their Pilbara Infrastructure assets (i.e railways) in order to get their gearing ratio down.

Not sure what FMG are thinking in terms of Iron Valley but Im guessing that a big bone of contention in any deal may be the take or pay type provisions in any royalty agreement with IOH.

Presumably FMG would want the abiltiy to mothball the deposit if their development plans are not as advanced in light of what has happened to the iron ore market since the initial agreement was signed as well as their ability to fund capital investment priorities.

IOH on the other hand would want financial penalites against such mothballing, potentially say with royalties payable regardless of actual production under a take or pay type arrangement.

If FMG want to play hardball then its IOH that needs to call their bluff or be confident they have an alternative solution that will monetise Iron Valley before FMG can/will.

In any case with IO prices now stablised hopefully this improves the mood for deal making compared to the carnage we saw a few months ago. Im still of the firm belief that our current SP has already priced in none of our assets being monetised in any case.