The Fortescue Metals Group Limited (ASX: FMG) share price is edging higher on Wednesday.
At the time of writing, the iron ore producer's shares are up 0.5% to $18.75.
Why is the Fortescue share price rising?
The Fortescue share price is rising today after the company signed an agreement with the Government of the Republic of Gabon to study the opportunity to develop the Belinga Iron Ore Project in the West African country.
According to the release, the agreement comprises a 36 month exclusivity period over an area totalling approximately 5,500 square kilometres to study and negotiate a mining convention for the development of the Belinga Iron Ore Project.
A separate Gabon mining company will be established to enter into the mining convention and to hold the mining tenure over the project. Fortescue will own 80% of this business, with the balance held by the Africa Transformation and Industrialisation Fund. This is an Africa-focused investment fund incorporated in Abu Dhabi.
The release advises that the joint venture will initially focus on exploration works to determine the potential size and grade of the Belinga iron ore deposit and logistics solutions.
Fortescue's outgoing Chief Executive Officer, Ms Elizabeth Gaines, commented: "Consistent with our active business development and exploration programs, Fortescue is pursuing global opportunities in iron ore that align with our strategy and expertise. We look forward to working with the Gabon Government on this project as we continue to invest in assets to optimise growth and returns in our iron ore business."
The company's Chairman and Founder, Dr Andrew Forrest AO, echoed this sentiment.
He said: "We welcome this important agreement and opportunity to work with the Gabon Government on a project with huge potential for Gabon's future economic growth and development. Fortescue began as a world-class exploration business and we believe that the Belinga Iron Ore Project is potentially one of the world's largest undeveloped, high grade hematite deposits."
"The opportunity to assess this project under a period of exclusivity and to partner with local expertise and the Gabon Government has the potential to add a significant iron ore operation to our world class portfolio," Dr Forrest added.
