Fortescue seeking more China investment: reports

SYDNEY (Reuters) - Australian iron ore miner Fortescue Metals Ltd (FMG.AX) is in talks with China's sovereign wealth fund about investing up to A$9.2 billion ($6.6 billion) to fund a mine expansion, Australian newspapers said on Monday.

The Sydney Morning Herald and The Australian said Fortescue's chief executive, Andrew Forrest, had met Chinese bankers at an economic forum in China at the weekend.

Citing a source close to the talks, the Herald said China Investment Corp (CIC) was interested in financing a huge expansion program at Fortescue's iron ore mine in the Pilbara region in a way that would avoid problems with Australia's Foreign Investment Review Board.

The investment would allow CIC to share in the profit upside from the expansion without exercising control or management participation, the source was quoted as saying.

However, another source said no deal was imminent, according to the Herald report.

The Australian said Forrest wanted at least A$2 billion to boost Fortescue's production capacity to 120 million tonnes a year.

"Any move beyond 80 million tonnes will require extra funding and we met a number of Chinese financiers over the weekend," the paper quoted a Fortescue spokesman as saying. The spokesman added that these financiers had included CIC.

Fortescue's current plans are to lift output to 55 million tonnes, from 39 million tonnes currently.

Chinese state-owned steelmaker Hunan Valin Iron and Steel Group this year lifted its stake in Fortescue to 17.55 percent in a $440 million investment, though the Australian government barred it from further increasing its stake.