US investor Philip Falcone is investigating offers for his stake in Fortescue Metals but analysts believe he is still bullish about Western Australia’s vibrant iron ore sector.

In an interview with The Wall Street Journal yesterday, the head of Harbinger Capital said his company had received multiple calls from strategic buyers looking to acquire its 15.8 per cent Fortescue stake.

He said that, at least for the moment, the hedge fund was just listening.

“We’ve yet to make a decision on which direction we plan to go, and if we sell, I will clearly not look to move the entire piece. I’m still bullish on the company,” Mr Falcone said.

DJ Carmichael analyst James Wilson said it was not surprising that Harbinger was “window shopping” for a potential buyer for a portion of its lucrative share of Fortescue.

He said China’s Baosteel was still being tipped as a potential suitor. “There is demand from China — they would obviously want it,” Mr Wilson said.

“But I could not see Harbinger offloading all its stake, especially as Fortescue is on the cusp of major expansion.”

Another analyst, who did not want to be named, said it was only a matter of Harbinger getting the right price from the right buyer as it was widely known the hedge fund was seeking to sell a percentage of its share in the West Australian iron ore miner.

Mr Falcone made the Fortescue link when commenting on his rejection of Cleveland-Cliffs attempted $10 billion bid for Alpha Natural Resources, the North American operator of coal mines and processing plants.

Harbinger controls almost 20 per cent of the iron ore producer, which in turn has an 85 per cent stake in West Australian iron ore miner Portman Mining.

The Wall Street Journal reported that Mr Falcone said the run-up in commodities prices made it the ideal time for Cleveland-Cliffs to focus on a sale rather than a big acquisition.

His comments mean that Cleveland-Cliffs could end up “in play”, meaning Portman could find itself under new control.

But the leading investor said he remained confident in the increasingly buoyant iron ore sector.

“We continue to be very bullish on commodities, both iron ore and coal, but we think there are better ways to capitalise on this other than by acquiring Alpha,” Mr Falcone said.

Mr Wilson said any move by Mr Falcone to offload some of his stake in Fortescue was not an indication of a swing away from the commodity.

“Harbinger would not be investing in Midwest if they were looking to get out of iron ore,” he added.

Harbinger last week increased its stake in Midwest Corp, taking it to 16.18 per cent, and it also has an 18.9 per cent holding in Murchison Metals.

Mr Wilson said the West Australian Government’s announcement on the preferred developer of a $1.5 billion port at Oakajee in Geraldton, tipped to be revealed today, could also result in Harbinger becoming directly involved in infrastructure in the region through its stake in the Mid West miners.

“Harbinger has the right idea with its diversified iron ore plans,” he said.

Find More Other News : Company, Exploration, Iron Ore, Mining Finance, Mining Investment, Mining Top News