By the end of 2010, Chonggang will have an annual steel production of 6.5mln tons and revenues of 35bln yuan, and iron ore is the major support. Chonggang stated on September 24 that at present besides five mines in Sichuan, Shaanxi and Chongqing making a domestic iron ore production of 10mln tons and self-sufficiency of over 50%, the government is negotiating the purchase of one iron mine with 3bln tons. If the project can succeed it will become Chongqing's overseas largest iron ore buying project.
Insiders believe that Australia's iron ore price is one of the global wind vanes. The iron ore giant of this country---BHP Billiton, provides iron ore raw materials for China's large-scale steel groups. If Chongqing succeeds in purchasing the Australian iron ore project, it may not only meet the iron ore demand from local state-owned companies, but may also help domestic enterprises avoid the risk from a rising iron ore price and carry out iron ore transactions as well bring online a new revenue stream.
Previously, Chonggang also imported iron ore material from Australia. Top officials at Chonggang unveiled that the company needs to import 5mln tons of iron ore, with4mln tons from Australia and Brazil.
Source: Alibaba
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