VALE SIGNS AGREEMENT WITH FORTESCUE AND MAY HAVE 15% OF THE AUSTRALIAN COMPANY

Amid a record gain in iron ore prices, Vale SA, the world’s biggest producer, has signed an accord with Fortescue Metals Group Ltd. that could see the Brazilian company take a minority stake in the Australian miner owned by billionaire Andrew Forrest.

The agreement gives Brazil’s Vale the option to buy as much as 15 percent of Fortescue, the Perth-based company’s Chief Executive Officer Neville Power said Tuesday on a conference call. That would be worth about A$1.3 billion ($965 million) based on Tuesday’s close, according to Bloomberg calculations. The accord also allows the companies to to form joint ventures and develop new mines.

Iron ore soared the most ever Monday after China’s policy makers signaled their willingness to buttress economic growth, boosting the outlook for steel consumption in the top consumer. A joint venture between Vale and Fortescue to blend iron ore at Chinese ports may begin within six months and deliver about 80 million to 100 million metric tons of the steel-making ingredient, Power told reporters.