Fortescue chair Andrew Forrest on prowl for resource projects

ANDREW Forrest has set up a new venture to buy undeveloped and abandoned ­resources projects while commodity prices are low.

Andrew Forrest. Andrew Forrest's plan for a 100-year agricultural partnership between Australia and China.

BILLIONAIRE mining magnate Andrew Forrest is seeking to replicate the runaway success of his Fortescue Metals Group with a bold new venture aimed at buying undeveloped and abandoned ­resources projects while commodity prices are low.

The new company — yet to be formally named — will be initially owned by Mr Forrest but will ultimately be listed on the Australian Securities Exchange as part of its longer-term expansion plans.

It has already begun studying the potential for acquisitions in precious and base metals as well as energy assets across Australia.

The counter-cyclical move comes after Mr Forrest’s net worth has more than halved in the past year, down from $6.2 billion to about $2.6bn, amid dramatic falls in Fortescue’s share price and the value of iron ore.

But the new scheme signals the entrepreneur remains confident in the potential of mining despite spending more of his time on his agricultural ventures and global philanthropy in recent years.

Mr Forrest has lured some of the key members of the team responsible for Fortescue’s success 10 years ago when it began discovering vast amounts of Pilbara iron ore on ground that had been inadequately explored or discarded by rivals Rio Tinto and BHP Billiton.

One of the Fortescue executives, John Clout, has been appointed technical director of the new company. Other appointments are expected in coming weeks along with a name for the company.

Mr Forrest said the strategy of building a new company to explore sites with large-scale production potential had been planned for some time.

All projects would be subject to rigorous re-examination under new technology, metallurgy, exploration and management techniques. “We are looking to create world-leading mining operations from areas and geology previously thought unable to support investment,” he said.

“Our willingness to support new technology, innovation and leadership unlocks great potential in abandoned or unexplored greenfield tenements.” Mr Forrest said he was confident in Australia’s resources sector. “The mining cycle appears to be reaching a generational low ebb with a depressed commodity market and cheap capital available,” he said.

“We are taking a counter-cyclical and long-term view with the aim of creating jobs across the country.”

Mr Forrest said the projects undertaken by his new company would not compete with Fortescue and would operate within strict governance procedures. ‎

“A process has been put in place to ensure that if any possibility of doubt regarding conflicting interest arises, the matter will be resolved independently and quickly,” he said.

“I have written to the FMG board asking them to approve this process and they have returned with their full support for our ­venture and its governance pro­cedures.”