Fortescue Metals is looking more likely to avoid a sale of equity in its prized Pilbara rail line after striking a $US1.15 billion ($A1.27 billion) deal with a Taiwanese company.
Taiwan's largest company Formosa Plastics Group will pay $US500 million ($A550.06 million) for use of Fortescue's port and rail facilities, which Fortescue will use to reduce its near $US10 billion in net debt.
Formosa will also pay $US123 million ($A135.31 million) for a 31 per cent stake in Fortescue's Iron Bridge magnetite iron ore project in the Pilbara, and $US527 million ($A579.76 million) to fully cover building stage one of the Iron project.
Chief executive Nev Power said the deal would strengthen Fortescue's balance sheet.
Asked whether the proposed sale of a $3 billion stake in its port and rail company, The Pilbara Infrastructure (TPI), would go ahead, Mr Power was non-committal.
The sale was announced when iron ore prices plunged last September, causing debt issues for the company, but prices have since rebounded.
A falling Australian dollar, extra volumes of iron ore and lower mining services costs have also helped Fortescue's financial situation.
"TPI transactions will only proceed on the basis that we get full market value for those assets and get it on terms that allow us to continue to operate our network efficiently," he told reporters.
But he added that sales of "non core assets" were helping repay debt more quickly.
The Iron Bridge joint venture includes Fortescue, China's largest steelmaker Shanghai Baosteel as well as Formosa.
Formosa has agreed to buy three million tonnes of iron ore a year to feed the world's largest steel mill that it is currently building in Vietnam.
"We have a very powerful joint venture combination to develop this project," Mr Power said.
The mine is expected to be in production in early 2015 and if a more costly second stage goes ahead it will be a 9.5 million tonne a year project.
Fortescue's shares had shot up 40 per cent in the last six weeks, but dropped 17 cents, or 4.1 per cent, to $4.03 on Friday.
