At 10.21am (AEDT), Fortescue (fmg.ASX:Quote,News) shares had gained 20.5 cents, or 15.5 per cent to $1.495.
"Increasing iron ore sales to China has caused a bit of a rally in Fortescue today, so there is a bit more optimism there for that stock,'' ABN Amro Morgans Ipswich manager Tony Russell said.
Yesterday, Fortescue said it will boost its iron ore exports after amending its contract with a major Chinese steel mill and buying back about $100 million in debt at a substantial discount.
The company said it had delivered a $360 million trading profit for the third quarter and indicated that a Chinese sovereign wealth fund could buy a stake in the miner.
The steel maker involved in the expanded contract was identified onlys as one of China's "top five stell mills''.
Fortescue refused to say more for reasons of commercial confidentiality.
Likely buyers include Tangshan Iron and Steel Group and Baosteel.
The enhanced, ten-year contract will increase Fortescue's exports by 3.5 million tonnes to 5.5 million tonnes to the Chinese steel mill over the 2009 calendar year.
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