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    For the nearologists....dare to dream FDL shareholders!

    Iron ore makes Forrest richest Aussie

    Yahoo Finance 24 Feb

    A promise to turn rust-red iron ore into gold for investors has transformed Andrew Forrest from a "penny stock" mining entrepreneur with a dream into Australia's richest man, worth more than $7 billion.

    After a decade promoting everything from Cuban-style nickel mining to underground desert oceans, Forrest appears to have hit paydirt with iron ore.

    In December, he surpassed media tycoon and close friend James Packer as Australia's wealthiest person.

    "Iron ore is the new gold," says Eagle Mining Research analyst Keith Goode.

    Worldwide, iron ore prices have been rising for the past six years straight, increasing a whopping 65 per cent in 2008 alone, thanks to an appetite among Chinese steel mills for imported ore.

    Besides amassing a fortune that would make even his Perth neighbour Alan Bond blush, the former stockbroker has become one of Australia's most generous philanthropists.

    He has donated millions of dollars to fight poverty and alcoholism among Aborigines, many of whom he employs digging mines and laying railroad tracks hundreds of miles across the outback.

    His one rule: alcohol must be banished before his money goes to any Aboriginal community, says his spokesman Paul Downie.

    Forrest, 47, has said he would rather give his billions away than die rich and is loathe to shoulder his three children with the "burden" of his fortune.

    "What all my kids know is that they're not going to inherit it and they're happy about that," Forrest told the West Australian newspaper last year.

    Forrest was travelling and unavailable to comment for this article, Downie said.

    From just a few pennies in 2003, stock in Forrest's Fortescue Metals Group galloped to more than $60 before splitting 10 for one in December to enable a loyal legion of mostly small investors a chance to afford more shares.

    Fortescue also counts Russian billionaire Viktor Rashnikov as a believer after Rashnikov's Magnitogorsk Iron & Steel Works payed about $400 million for a 5.2 per cent stake in September.

    Rumours are rife Rashnikov may try and acquire the whole company in order to divert millions of tonnes of ore that Forrest has promised to China to Magnitorsk-owned steel mills in Russia.

    To do so, he would need the Forrest family's 36 per cent holding in the company.

    Nicknamed "silver tongue" in the mid-1990s after convincing a group of US bond holders to put up $420 million in debt funding to build a company making nickel metal in the outback using rejigged Cuban technology, Forrest has already sold 45 million tonnes of ore to some of China's biggest steel mills, though Fortescue won't make its first shipments until May.

    "China can't import enough iron ore, they're desperate for the stuff," says James Wilson, a mining analysts for DJ Carmichael & Co in Perth. "Forrest is a smart guy and saw this coming before a lot of other people."

    The boom hinges on China's willingness to import much of the ore it needs to support its massive industrialisation rather than better exploit its own natural resources.

    Forrest, who battled a bad stutter as boy and who spent summers as a jackeroo near aboriginal outposts, portrays Fortescue as a David to the international Goliaths Rio Tinto and BHP Billiton, who have long cornered Australia's ore reserves but are now struggline to keep pace with demand.

    He is battling both companies in court to be allowed to ship Fortescue's ore on their private rail lines.

    "Forrest is the quintessential Aussie bloke, just as happy to say g'day to the garbage man as the prime minister," says Tim Treadgold, a mining commentator in Perth."He just happens to be the richest Aussie bloke."

 
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