China's second largest steelmaker Baosteel Group Corp is very interested in participating in Rio Tinto and Aluminum Corp of China Limited's Simandou iron ore project in Guinea.

Baosteel Group Corp chairman Mr Xu Lejiang in an interview in Shanghai said that “They must find a partner in China.”

He added that 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 USD 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 USD 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 USD 1.35 billion for a 44.65% stake.

(Sourced from Bloomberg)