Australia's Fortescue Metals Group ( FMG), the World's fourth largest iron ore producer, announced on Friday that it had signed a 1.15 billion U.S. dollar joint venture agreement with Formosa Plastics Group, the largest private company in China's Taiwan.

Formosa will invest 1.15 billion U.S. dollars in the FMG Iron Bridge Joint Venture, established to develop the FMG Iron Bridge Project in Western Australia's Pilbara region.

Under the deal, Formosa will acquire a 31 percent interest in FMG Iron Bridge Joint Venture and fund the first stage of its development.

Formosa is currently investing in the construction of a steel mill at Ha Tinh in Vietnam.

The Taiwanese company will also help fund the second phase of the development and buy up to 3 million tonnes of iron ore a year to supply its steel mill in Vietnam, which is expected to commence production in 2015.

Fortescue Chief Executive Officer New Power said the deal represents a pivotal step in the development of the FMG Iron Bridge Project.

"Importantly, the transaction also delivers a further strengthening of Fortescue's balance sheet," he said in a statement.

Fortescue said the deal is subject to Australian Foreign Investment Review Board and Taiwan Investment Commission approval, which is expected in September 2013. Endi

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