Wuhan Steel escalates to be world's largest owner of mining resources
Post Date: 22 Feb 2011 Viewed: 552
Wuhan Iron & Steel Group agreed Wednesday with Canada's Century Iron Mines Corp. to jointly develop mining projects, according to the China Business News Thursday.
The form of cooperation may be similar to that between Wuhan Steel and Canadian Adriana Resources Inc, (ADI), which Wuhan may first buy stocks in Century Iron and then both sides jointly develop mining projects, said an insider.
Century Iron has three iron ore projects in Quebec and Wuhan Steel's investment will not only help guarantee raw-material supplies and lower production costs, but also break the miners' oligopoly and help maintain China's national interests, according to Wuhan Steel.
As one of China's largest steelmaker, Wuhan Steel invested in eight iron ore projects - in Canada, Brazil, Australia, Liberia and Madagascar, holding billions of tons of iron ore resources, which made itself owner of the most mining resources among global mills, according to reports.
This is another step for Wuhan Steel to seek to alleviate its reliance on ore purchases from producers including BHP Billion Ltd., Rio Tinto Group and Vale SA, said an industry analyst.
The steelmaker plans to boost steel production capacity to 60 million metric tons in 2011-2015 from 40 million tons.