PERTH, Mar. 24 -- Fortescue Metals Group Ltd., Australia's third-biggest iron ore producer, is prepared to sell majority stakes in some of its magnetite iron ore projects in Western Australia to overseas steel mills.

"We're happy to let up to 50 per cent go, and if the price is right we may even let more go," said Andrew Forrest, chief executive officer of Perth-based Fortescue said today at a conference. "Provided we have a meaningful stake, we're happy to sell down."

Fortescue's magnetite projects include a joint venture with Baosteel Group Corp., China's second-largest steelmaker, that the company said is "about to commence" a study to develop a magnetite project with inferred resources of 1.23 billion metric tons, according to slides presented at the conference. Its magnetite targets add up to more than 20 billion tons, according to the slides.

Magnetite is a lower grade of iron ore than the hematite product mined by BHP Billiton Ltd. and Rio Tinto Group from the state's Pilbara region. Fortescue shares advanced 0.8 percent to close at A$4.79 in Sydney today.

Fortescue is seeking to widen its customer base outside China and has shipped its first cargo to a non-Chinese Asian buyer. In October, the iron ore producer said it was in talks to sell to South Korean and Japanese mills.

Forrest said he didn't think Australian-China relations would be damaged by today's trial of four Rio Tinto executives, including Australian Stern Hu, in Shanghai for bribery and infringing commercial secrets. China's appetite for Australian iron ore and other commodities wouldn't be affected by the case, he said.

Growth Material

Iron ore "is a fundamental material to any growth economy," Forrest said. "Despite what goes on, the pragmatism and the reality will continue. "

China may seek prison sentences of at least five years for the four, said Tao Wuping, a lawyer representing one of the defendants. Hu pleaded guilty to bribery yesterday.

Forrest said he felt "very deeply" for Hu and his family. Fortescue hasn't instructed its China-based employees to behave differently in the wake of the arrests, he said.

"When I woke up this morning and saw that Stern Hu had admitted to a bribery charge, I was surprised," Forrest said. "We have a very strong straight-down-the-line view to China. That doesn't mean we'll always agree. The reality in China is that areas which are black and white in Australia are much greyer over there."

Forrest, 48, has a fortune of $4.1 billion, the largest in Australia, Forbes magazine said March 4 in its annual rich list. He recovered top position after slipping to fifth last year in the wake of the global financial crisis.