Northern Iron Recommissions Norway Project

Sydvaranger Recommissioned Ahead of Schedule

Northern Iron, the Australian company formed to acquire the Sydvaranger Iron Project in northern Norway, has reported Friday that the troubled project in Norway will be re-commissioned ahead of schedule.


Chairman David Griffith informed shareholders at the company's annual general meeting that "the rectification program will be completed four months ahead of schedule and the cost of the rectification program is currently tracking below budget."


The project went live last year four months late last year, which led Northern Iron to seek additional funding but Mr Griffiths said that concentrates were eventually produced and shipped. However, he admitted that there had been some shortcomings on the company’s part as it was not able to produce the quality of concentrate it had previously claimed.


Northern Iron has allocated some $US25 million for development projects that will rectify the project’s operational flaws. Negotiations are under way with UK steelmaker Corus to discuss late deliveries of the mine output.

Norsk Secures Bauxite Supplies

Vale Deal Will Give Access to 100 Years of Supplies

Norway’s Norsk Hydro has agreed to take over bauxite, alumina and aluminum assets from Vale SA for $4.9 billion, securing 100 years’ worth of bauxite supplies and making the Brazilian miner its second-largest shareholder. Bauxite is refined into alumina, which is separated during smelting to produce aluminum.

The deal will give Hydro access to raw materials used in aluminum production and will enable it to become less reliant on mining companies supplying bauxite and alumina.

Hydro is paying $1.1 billion in cash, giving Vale a 22 percent stake and taking on about $700 million of net debt in return for the assets, the company said on Sunday.
Hydro is taking control of Paragominas in Brazil, the world’s third-biggest bauxite mine, and 91 percent of Alunorte, the largest alumina refinery, as part of the deal. The company will have a 51 percent stake in the Albras aluminum plant and 81 percent of the CAP alumina project.

Hydro’s Chief Executive Officer Svein Richard Brandtzaeg described the deal as a “transforming transaction” at a press conference yesterday in Oslo.
The assets will “significantly improve” Hydro’s financial position and secure bauxite supplies “in a 100-year perspective” according to a statement released by the company. Vale said yesterday it expects the transaction will create “substantial value” for shareholders.

The deal will bring the Norwegian government’s stake in Norsk Hydro down to 34.5 per cent from 43.8 per cent previously. The country’s Minister of Trade and Industry, Trond Giske, said Norway’s ambition is to bring the holding back up towards 40 percent.

Vale looks set to focus on expanding iron ore production. On Friday it said it was paying $2.5 billion for iron ore deposits in Guina from BSG Resources (Guinea) Ltd.

Norway Iron Ore Project Comes Closer For Northern Iron

Success in raising $14.3 million through a placement will rejuvenate progress at WA-based Northern Iron's promising iron ore project in Norway.

Northern Iron, which is back on the boards today after a trading halt, raised the funds as part of a $55.3 million equity raising that included Perth-based OM Holdings agreeing to take shares equal to a 10 per cent share in the company.

Its Norwegian Sydvaranger project, which aims to supply iron ore to European markets, has been dogged by plant issues which has affected product quality and throughput.

The institutional placement will fund an overhaul of the plant and repair these problems.

In the quarter ended December 31, Northern Iron mined 378,000 tonnes, up 10 per cent on the previous quarter, with concentrate production of 197,000 tonnes.

The first sale of the product were made during the quarter but because of reduced quality, these were shipped to China. European sales are expected when the plant and quality improve.

OM Holdings and Northern Iron now work together in rectifying Sydvaranger's issues and are negotiating for a formal marketing agreement over sales into Asia.

OM Holdings said Sydvaranger has ``the potential to become an independent long-life world-class emerging iron-ore opportunity''.

``OMH's commodity diversification strategy incorporating this investment is in line with its stated objective of building a significant carbon-steel materials business,'' said OM Holding's CEO Peter Toth.

``This investment is also viewed as strategically important and complementary to OMH's existing operations within the global steel materials market.''

Mr Toth said OMH would assist Northern Iron to penetrate the growing Asian market and facilitate in extracting maximum value from Northern Iron's production.

``Short and long-term synergies have been identified between the two companies and OMH considers that this investment will provide an excellent platform on which these synergies can be executed,'' he said.

``The Sydvaranger iron ore project hs a number of competitive advantages relative to many of its respective sized peers, predominantly driven by the size and quality of its resource, its established infrastructure base, long mine life, historically proven iron concentrate product, independent competitiveness in major steel markets and potential for future expansion opportunities.'

Source: Perth Now