Fortress Minerals unit bags 15-month offtake deal with Malaysia steel mill

IRON ore concentrate producer Fortress Minerals has entered into a new 15-month offtake agreement with a third-party domestic steel mill in Malaysia.

Fortress Minerals' subsidiary will deliver about 375,000 wet metric tonnes of iron ore from Oct 11, 2021 to Dec 31, 2022, to the steel mill under the latest agreement.

In a bourse filing on Tuesday (Oct 12), the board said the new offtake deal will provide recurrent income and cash flows to the group as well as strengthen its financial position.

It will also ensure that the group remains well-placed to execute its growth plans and provide long-term value to shareholders, the board added.

Fortress Minerals expects the new agreement to contribute positively to the group's earnings per share for the financial year ending Feb 28, 2022.

The deliverables are subject to a variance of an additional 30 per cent or a reduction of 10 per cent at the option of the Fortress Minerals subsidiary.

The selling price will be based on the same formula used in the previous one-year offtake deal. The formula is guided by, among other things, the daily price index for 65 per cent Fe CFR North China published by S&P Global Platts.

Shares of Catalist-listed Fortress Minerals fell 1.2 per cent or S$0.005 to close at S$0.415, before the announcement was made.