The West Australian reported that an improved global outlook for iron ore is thought to be behind a move that will see Fortescue Metals Group assume responsibility for marketing all the ore from its Nullagine joint venture with BC Iron in the Pilbara.

In a break with plans to have each company market its 50% share of production separately, The West Australian understands Fortescue will take over marketing for the project to take advantage of its existing customer base and use Nullagine ore to meet customer demand.

It is believed that increasing optimism about global demand is behind what appears to be a change of heart from Fortescue, which is thought to have its customers clamoring for more ore than it can deliver.

However, it remains unclear what the move will mean for BC Iron's deal with Australian trading house Tennant Metals, under which it has the right to act as agent for the free-on-board sale of about 50 per cent of BC's share of ore from Nullagine for at least five years.

Mr Mike Young MD of BC confirmed the group had set up a joint marketing team with Fortescue and recently traveled to China to meet some of the FMG's past and present customers. He said that "But we still have options with Tennant and they're providing us with expert advice.”

Production at Nullagine is expected to start early next year with an initial 1.5 million tonnes a year operation, to expand to 3 million tonnes per annum and potentially 5 million tonnes per annum.

(Sourced from The West Australian)