According to Mr Dong Lin president of Chongqing Steel on November 7th "We will actively seek overseas mining resources in these two years."

He said that the group would complete the delivery of transferred equities of Asia Iron and Steel Co Ltd whole owned subsidiary under SINOM Limited. After that, overseas iron ore resources would be continually supplied to the steel maker new steel mill in Changshou.

Chongqing Steel Group singed agreement with SINOM Limited and its whole-owned subsidiary Asia Iron and Steel Co Ltd to pay no more than USD 258 million in exchange for 60% private placement of Asia Steel.

The magnetite reserves of Extension Hill are expected at some 1.78 billion tonnes. The first stage project is financed with about USD 2 billion. Mr Dong Lin added that "We are still waiting for the green light from NDRC, MOFCOM and Australia's Foreign Investment Review Board to start."

He also disclosed that Chongqing Steel needed about 5 million tonnes of iron ore annually during the past years among which about 4 million tonnes of iron ore came from Australia and Brazil. The steel group would be greatly shocked if the import price for iron ore presented sharp ups and downs.

Mr Dong said "Once the project is successful, our demand for iron ore will be totally met. And at the same time, we could also help our domestic rival fellows to avoid possible risk caused by the iron ore price rise."

It is know that Chongqing Steel's annual capacity will reach 6 million tons as its new mill in Changshou is put into operation. By 2010, the steel group with 7 production lines will boast annual capacity of 10 million tonnes.

(Sourced from MySteel.net)
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