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MCC, a state-owned metallurgical conglomerate specializing in scientific research, industrial engineering, and international trading, has entered into an agreement with the Russian partner to set up a joint venture for the project.
The Beijing-based metallurgical conglomerate will control a 25 percent stake in the venture, and take charge of its engineering contracting. The Russian steelmaker will own 75 percent of the venture and be responsible for its financing.
All the iron ore concentrates produced by the project will be shipped to China, and 60 percent of them will be solely sold by MCC at prices 10 percent lower than international contractual prices.
The project, with iron ore reserves of 1.56 billion tons, is capable of turning out iron ore of about 45 million tons a year, including iron ore concentrates of 15 million tons with an iron tenor of more than 60 percent.
MCC is scheduled to complete the acquisition of the project from Cape Lambert Iron Ore Ltd., in which Evraz has a 19 percent stake, for AUD 400 million at the end of this month.
The acquisition will just be part of the global expansion of the Chinese metallurgical conglomerate. A report said last November that MCC and Jiangxi Copper Co., Ltd. (SHSE: 600362: SEHK: 0358), one of the largest non-ferrous metals companies in China, would exploit the Aynak Copper Deposit in Afghanistan.
Previously, the two Chinese companies formed a consortium and gained priority to participate in the public bidding for exploiting the deposit, 35 kilometers south of Kabul.
Later, it won the bidding with an offer of USD 808 million, said Zha Kebing, assistant chief engineer of Jiangxi Copper Corp. (JCC), parent of Jiangxi Copper.
In the deposit discovered in early 1970s, the former Soviet Union completed the geological exploration in the central and western diggings in 1978 and proved ores of 705 million tons, 1.26 percent or 11 million tons of which were copper ore.
On June 26, 2008, MCC announced that it would develop an iron ore mine in Mindanao Island, South Philippines, along with a local company, in line with a recent framework agreement.
MCC Overseas Ltd., a controlling subsidiary of the metallurgical conglomerate, will check and manage the project in its initial operation.
MCC would invest about USD 1.5 billion in the prospecting at first, and expected to establish a steel plant in the Philippines and pour at most USD 10 billion into the plant, earlier reports said.
(USD 1 = CNY 6.83)
From www.cnstock.com, Page 1, Friday, August 01, 2008 info@SinoCast.com
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