Baosteel says `very interested' in Simandou
- Publishing Date
- 20 May 2011 11:40am GMT
- Author
- Mining Journal
Baosteel Group Corp, China’s second-largest steelmaker, is “very interested” in participating in Rio Tinto and Aluminum Corp of China Ltd’s Simandou iron-ore project in Guinea.
“They must find a partner in China,” Baosteel Group Corp Chairman Xu Lejiang said in an interview in Shanghai when asked whether he would be interested in partnering Chalco, as Aluminum Corp is known. “Chalco must sell iron ore to China from its investment because it isn’t an iron-ore user.”
Simandou, described by Rio Tinto as the world’s biggest undeveloped iron-ore deposit, will cost more than US$10 billion to build, the company said in April when it gave a likely start date of 2015. Baosteel’s participation would help secure sales of the raw material at a time when iron-ore supply is forecast to outstrip demand.
The total cost of the project may be as much as US$19 billion to develop, based on the cost of BHP Billiton’s comparable expansions in Western Australia, JPMorgan Chase & Co said last month. Chalco agreed to pay US$1.35 billion for a 44.65% stake.
Beijing-based Chalco will work with other Chinese companies to jointly develop the project including China Railway Construction Corp and China Communications Construction Group, Chalco said July 30.
Shen Hui, a Chalco spokeswoman, declined to comment. Zhao Zhengang, general manager of Chalco’s overseas department, didn’t return calls to his mobile phone for comment.
Rio Tinto, which has spent US$700 million on the project, is studying building an operation to produce 95Mt of iron ore a year. The plan also includes building a 650km railroad through 21km of tunnels to reach a port on the coast.
The cash price of 62%-iron ore arriving at China’s Tianjin port has almost tripled to US$178.10/t as of May 17, from November 21, 2008, when data became available, according to the Steel Index.
The surging prices prompted “everyone who has money to rush in to invest in iron-ore projects,” Mr Xu said, “in any case, these investments will change the supply demand situation” of the raw material.
Baosteel, which bought 15% of Perth-based Aquila Resources Ltd in 2009, is also studying building an iron-ore mine in Australia with Posco, American Metals and Coal Industries Inc and Aquila. It is discussing with the Western Australian government on logistic spending needed for the project, Mr Xu said.
May 20 (Bloomberg)
“They must find a partner in China,” Baosteel Group Corp Chairman Xu Lejiang said in an interview in Shanghai when asked whether he would be interested in partnering Chalco, as Aluminum Corp is known. “Chalco must sell iron ore to China from its investment because it isn’t an iron-ore user.”
Simandou, described by Rio Tinto as the world’s biggest undeveloped iron-ore deposit, will cost more than US$10 billion to build, the company said in April when it gave a likely start date of 2015. Baosteel’s participation would help secure sales of the raw material at a time when iron-ore supply is forecast to outstrip demand.
The total cost of the project may be as much as US$19 billion to develop, based on the cost of BHP Billiton’s comparable expansions in Western Australia, JPMorgan Chase & Co said last month. Chalco agreed to pay US$1.35 billion for a 44.65% stake.
Beijing-based Chalco will work with other Chinese companies to jointly develop the project including China Railway Construction Corp and China Communications Construction Group, Chalco said July 30.
Shen Hui, a Chalco spokeswoman, declined to comment. Zhao Zhengang, general manager of Chalco’s overseas department, didn’t return calls to his mobile phone for comment.
Rio Tinto, which has spent US$700 million on the project, is studying building an operation to produce 95Mt of iron ore a year. The plan also includes building a 650km railroad through 21km of tunnels to reach a port on the coast.
The cash price of 62%-iron ore arriving at China’s Tianjin port has almost tripled to US$178.10/t as of May 17, from November 21, 2008, when data became available, according to the Steel Index.
The surging prices prompted “everyone who has money to rush in to invest in iron-ore projects,” Mr Xu said, “in any case, these investments will change the supply demand situation” of the raw material.
Baosteel, which bought 15% of Perth-based Aquila Resources Ltd in 2009, is also studying building an iron-ore mine in Australia with Posco, American Metals and Coal Industries Inc and Aquila. It is discussing with the Western Australian government on logistic spending needed for the project, Mr Xu said.
May 20 (Bloomberg)
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