Sinosteel, Anshan To Continue Investing In Australia

Move Comes Despite 40 per cent Tax

China's large steel makers, Sinosteel and Anshan Iron and Steel Corp, say they are willing to continue to invest in Australia, despite a proposed 40 percent tax on the profits of Australian mining companies.

Speaking at a conference in Beijing on Monday, Sinosteel president Huang Tianwen said "We are reviewing how the tax will impact our companies, and undoubtedly, it will affect costs and profits in our local projects," however the company is still committed to exploring overseas resources.

Bai Jingpu, vice-president of Anshan Steel, also said the company is evaluating and analyzing the impact of the "super tax" on the Australian mining industry, but he also added that the company will continue to invest in the country.

Australia’s tax plan for miners was released last week and is expected to start in July 2012. Some Australian companies have criticised the plan saying it will adversely affect future projects in the country. Xstrata Copper has already announced that it is to shelve future plans for projects in northern Queensland.

However, Chinese steelmakers companies are looking to secure raw material supplies, particularly in the light of huge increases in raw materials and a shift from annual to quarterly contracts by the big three global iron ore miners, BHP Billiton, Vale and Rio Tinto.

Sinosteel and Anshan already have projects in Australia. Sinosteel bought iron ore company Midwest in 2008 while Anshan steel has a stake in Ginadalbie Metals Ltd with whom it is developing the Karara iron ore project in Western Australia.
China’s iron ore imports grew by 11.6 per cent in the first four months of this year compared to the corresponding period in 2009.

Zimasco To Increase Ferrochrome Production

Sinosteel Subsidiary To Treble Production

China’s Sinosteel Corporation has announced plans to increase production at its Zimbabwe Mining and Smelting Company subsidiary by 300 percent.

Mr Zhang Suwei, Sinosteel South Africa managing director, told reporters in South Africa that the firm will expand ferrochrome production from the current 210 000 tonnes a year to between 500 000 and 600 000 tonnes. Zimasco is said to have access to the world’s second largest reserves of chrome after South Africa. Two furnaces were opened in April last year following the liberalisation of the Zimbabwean economy.

Sinosteel has a 92 per cent stake in Zimasco and has an option to buy the remaining eight percent, however it is one of the companies expected to comply with Zimbabwe’s new Indigenisation and Economic Empowerment regulations that seeks to cede 51 percent shareholding to locals, regulations that have been greeted with a mixed response.

Brockman Signs Iron Ore Deal With Sinosteel

Deal Could Be Worth $A6 Billion

Pilbara iron ore producer Brockman Resources has signed a sales deal with China's largest iron ore importer, Sinosteel, which could be worth more than $6 billion.

Brockman announced on Tuesday that it has signed a landmark memorandum of understanding with Sinosteel Australia, for the purchase of up to 50 per cent of future production from its Marillana iron ore project in Western Australia.

"This is a key milestone because you are now dealing with one of the most credible international companies when it comes to offtake and it shows credibility to us and our project," managing director Wayne Richards said.

"To get someone like Sinosteel willing to market 50 per cent of your ore is a major benefit." Mr Richards added that talks have been taking place for 18 months.

The agreement involves the purchase of up to 10 million tonnes a year of production over an initial five-year period.

Commenting on the deal Sinosteel Australia's managing director Li Ying said: "Our company is keen to co-operate and partner with Australian companies with credible projects seeking to leverage our capability to supply raw materials for China's steel industry, whether this is iron ore, manganese, chrome ore or coal."

Sinosteel Plans Expansion At Zimbabwe Ferrochrome Plant

Sinosteel Corp., China’s biggest iron-ore trader, plans to expand capacity at its ferrochrome plant in Zimbabwe by as much as 30 percent, a company executive said on Thursday.

“We are planning to expand the ferrochrome capacity there by 50,000-60,000 tons, from the current 200,000 tons a year,” Zhang Suwei, managing director at Sinosteel South Africa (Pty) Ltd., said in an interview in Hong Kong with Bloomsberg today.

Iron Ore Exploration Intensifies In Cameroon

Exploration works are currently going on in Mongmamel, some 60 kilometres from Kribi towards Campo in Cameroon, to determine the amount of iron ore and its richness for imminent exploitation. A Chinese firm, "SINOSTEEL" under its programme, "China NCEII Iron Ore Exploration Project Management", is currently digging and extracting samples of the mineral for studies.

The President, General Manager of SINOSTEEL, Tianwen Huang, went visiting the site Wednesday November 4, 2009. Though he declined disclosing to the press the purpose of his visit to Cameroon and to the site, officials of the company who opted for anonymity said the visit was to appraise work on the project. Workers on the site told CT that they have been working there for over six months and that their work consists in detecting and extracting the mineral. They disclosed that already extracted quantity is packaged and sent abroad for proper study.

The Director of Mines and Geology in the Ministry of Industries, Mines and Technological Development, Oscar Matip, who accompanied the SINOSTEEL officials to the sites said the Chinese firm wants to confirm earlier diagnoses of the presence of minerals on the sites. Earlier studies, he said, showed that some 350 million tons of reserves were there and that the sampling work the Chinese firm is undertaking could also improve on earlier findings. He disclosed that the ongoing certification work on the site will permit them to determine how much of the mineral is there. "This will be followed by an evaluation of the quantity of the reserve and then exploitation", Mr. Matip said, adding that it is only then that an exploitation contract could be signed between the extracting firm and the government of Cameroon.

Over 1,800 metres of the sampling works have already been executed and officials of the Ministry said, government, through control teams from the Ministry as well as the South Regional Delegation of Industries, Mines and Technological Development, ensures the control of the project.

SINOSTEEL Corporation is a central enterprise under the administration of the State-Owned Assets Supervision and Administration Commission. It is mainly engaged in developing and processing of metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, and related engineering technical service and equipment manufacture.

Source: AllAfrica.com

Sinosteel Plans Two Further Steel Plants In India

After securing land at Haldia in West Bengal for a new rolled steel plant, Chinese steel giant Sinosteel is also planning two further plants, one in West Bengal and the other in Jharkhand.

In West Bengal Sinosteel India has identified land in Kharagpur, where it plans to put up a steel plant in joint venture with an Indian steel maker and a larger plant in Jharkand, for which it had signed an MoU with the Jharkhand government in 2007.

The Jharkand plant is a 2-million tonne integrated steel plant which can be scaled up to 5 million tonnes and is likely to be built in the Silli-Chandil area near Ranchi.

Sinosteel is eyeing about 300 million tonne of iron ore reserves in the area, for which it will apply for a mining lease.

Sinosteel India, which commenced ore exports in 2005, is already the largest foreign exporter of iron ore from India and exports to its parent in China. Last year it exported 11 million tonnes of ore.

Wth an annual turnover of $16-billion, Sinosteel is the second largest steel company in China.

Sinosteel India To Export More In 2009

Despite the global economic crisis, Sinosteel India, the largest exporter of iron ore from India to China, is expecting to supply more steel than it did last year.

Zhongtao Wang, director, Sinosteel India, said that last year the company supplied approximately 11 million tons of iron ore from India and this year it would ship more than that. However, he clarified that the final figures would only emerge after the first quarter of the financial year.

He was speaking on the sidelines of the International Steel Seminar in Kolkata. Total imports of iron ore into China was 70-75 million tons from India, significantly lower than in 2007.

Mr Wang said, “We will have to overcome the difficulties of the last quarter caused by the financial crisis. Sinosteel happens to be a comprehensive service company for the Chinese steel industry, providing raw material, logistics, sales service and technical supply.

A lot would also depend on the Chinese policy which would be issued after the spring festival. “Government may issue some policies based on general consideration, financial loan and something on transporation. These would be the linkages for the steel industry,” said Wang.

On the outlook for iron ore pricing, Wang said, the current market price was close to reasonable levels. “In 2007, all the prices caused serious inflation, now prices have cooled down and are more rational. Prices are also more in tandem with the final product price. But all this will become clear after the first quarter,” said Wang.

China imports more than half of its iron ore requirements while exports of hard coking coal and coke are controlled through licensing.

India has approximately 23.59 billion tons of iron ore scattered in states like Jharkhand, Orissa, Chhattisgarh, Karnataka and Goa. Of this, 6.311 billion tons is proven reserves and balance are probable and possible reserves.

Source: The Hindu

Sinosteel On Brink Of Midwest Takeover

Sinosteel Corp is on the cusp of gaining control of Midwest Corporation after four of the company's directors decided to tend their own shareholding into the $1.36 billion takeover offer.

Midwest chairman Jesse Taylor and directors Francis Ng, Steven Chong and Stephen de Belle, have decided to accept the $6.38 cash per share bid offer for their collective 4.1 per cent holding in the company.

This will give Sinosteel, China's second largest iron ore trader, a 49.68 per cent holding in iron ore miner, Midwest.

The decision by Midwest directors to accept the Sinosteel takeover bid comes after the Chinese group upped its stake in the company to 45.58 per cent and Murchison Metals shelved a merger proposal with the iron ore miner.

Murchison terminated the merger proposal after failing to gain support from Sinosteel, Midwest's largest shareholder.

However, Murchison has vowed to stifle Sinosteel's takeover by not accepting the bid for its 10 per cent holding in Midwest, which effectively blocks a compulsory takeover of the company.

Sinosteel's takeover attempt could be further frustrated by Murchison's largest shareholder - Harbinger Capital Partners - which holds a 9.11 per cent stake in Midwest.

Midwest directors Dato David Law and Datuk Roger Tan, which hold about 13.1 per cent of the company between them, are yet to decide whether to accept the Sinosteel offer.

Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.



Source: News.com.au

Murchison Aims To Block Midwest Takeover

Murchison Metals Ltd has vowed to stifle Sinosteel Corp's $A1.36 billion takeover bid for Midwest Corporation after the Chinese commodity trader refused to support a merger of the two iron ore companies.

Murchison on Monday terminated the planned merger with Midwest after failing to gain support from the iron ore company's major shareholder Sinosteel, China's second largest iron ore trader.

"We believe that there is potential for there to be greater value in remaining a shareholder of Midwest than accepting the Sinosteel offer," Murchison executive chairman Paul Kopejtka said in a statement.

The refusal by Murchison to accept the $6.38 cash per share bid for its 10 per cent stake will effectively block a compulsory takeover of Midwest.

Murchison and Midwest operate modest iron ore mines in Western Australia's mid-west region and want to develop much larger operations, depending on the construction of supporting infrastructure.

Sinosteel holds 45.58 per cent of Midwest, while Murchison's largest shareholder, Harbinger Capital Partners, has a 9.11 per cent stake.

Murchison proposed in May a reverse takeover for Midwest that was engineered to prevent Sinosteel, which at the time held 19.89 per cent of Midwest, from blocking the merger deal.

The reverse takeover was structured so that Midwest only required 50.1 per cent of votes cast in favour of the merger to approve the deal.

However, Sinosteel declared its takeover free of conditions and proceeded to raise its stake in Midwest.

Sinosteel launched a hostile bid for Midwest in March, valued originally at $1.2 billion, or $5.60 per share, after the two companies were unable to agree to terms on an earlier takeover proposal, also pitched at $5.60 a share, which Midwest said undervalued the company.

The Chinese trader, which has a 2.4 per cent stake in Murchison, sweetened the bid in April to $6.38 cash per share and declared the takeover offer unconditional last month.

Midwest shares closed unchanged at $6.38, while Murchison lost 10 cents to $2.90.

Source: The Melbourne Age