Bloomberg quoted China Minmetals Corp the nation’s biggest metals trader said annual iron ore price talks between Chinese steel mills and producers remain deadlocked.
Mr Zhou Zhongshu president of state-owned, Beijing-based Minmetals, a Fortune Global 500 company said “There are still discussions and there is no final result yet. Although we are the biggest steel distributor in China, this decision will be made by the China Iron & Steel Association.”
China, the world’s biggest buyer of iron ore has rejected a benchmark price accord struck by Rio Tinto Group and Nippon Steel Corp. for a 33% cut instead calling for prices to drop as much as 45%. Steel mills in Japan and South Korea forced the reduced prices after the worst recession since World War II slashed global demand.
Mr Andrew Michelmore CEO of the company’s Australian unit, Minerals & Metals Group said China Minmetals may study acquisitions of iron ore assets. He said that “If we can find an opportunity that does add value, with good returns, then we should pursue it.”
MMG this week completed a USD 1.4 billion acquisition of mines from OZ Minerals Ltd including the world’s second-biggest zinc operation and supplies of copper, lead and nickel.
Mr Wang Lixin president of China Minmetals Nonferrous Metals Co said MMG may consider an initial share sale in Australia if the market conditions permit in the future. He said that the recovery in metal prices in the past two months may not be an accurate indicator of rebounding demand. He added that that really doesn’t represent that the market has recovered. The market will be flat in the next one or two years. It will take time to recover but once it has recovered I think the demand will be strong.”
MMG acquired the Century zinc and lead mine in Queensland State, the Rosebery zinc and lead and Avebury nickel mine, both in Tasmania state, and the Golden Grove mine in Western Australia from OZ Minerals. The company also owns the Sepon copper and gold operation in Laos as well as exploration projects in Thailand and Canada.
Mr Michelmore said MMG is reviewing the outlook for the nickel market as it studies a possible restart of its Avebury mine which was closed last year. He said that the mine would “making cash” at current prices.
He added that the company has also started a review of the cost of building the Dugald River project, which is the next best zinc mine in the world. It’s also seeking to boost copper output at the Sepon mine in Laos.
(Sourced from Bloomberg)
