October 11, 2008

CISA cooperating with Mhag to ease iron ore pressure

It is reported that China is now under cooperation negotiation with Mhag Severcos E Mineraca a young iron ore giant in Brazil. This is hopeful to help China weigh heavier in the upcoming iron ore benchmark price negotiation.

Mr Luo Bingsheng VC of China Iron and Steel Association revealed recently at The 2nd China Steel Raw Materials & Fuels Summit that North Brazil based Mhag Severcos E Mineraca is visiting CISA and is expected to launch large scale cooperation with Chinese steelmakers.

Mr Luo said “Mhag plans to produce 3 million tons of iron ore this year and 5 million tons next year. The figure will reach 35 million in the following years. It is expected to officially cooperate with Chinese steelmakers next year and will provide the latter with some 30 million tons of iron ore annually. It will announce the details of the cooperation in the coming one or two months.“

As iron ore price rises in recent years, ore exploitations speed up. The three iron ore giants also accelerate M&As and cooperation to maintain competitiveness. Mr Yan Bangsong VC of China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters forecasted the three iron ore giants would soon dominate some 80% of global iron ore resources from current 70%.

Besides cooperation with young large scale iron ore miners, cooperation with resourceful South Africa and Commonwealth of Independent States countries such as Russia, Ukraine and Kazakstan can also benefit China in competition with western steel giants.

(Sourced from MySteel.net)