Singapore — MININGREVIEW.COM – 10 April 2008 – Palabora Mining Company – operator of South Africa’s largest copper mine – may invest as much as US$1 billion (R8 billion) to develop a five-fold increase in its output of iron-rich magnetite.
Interviewed here by Bloomberg News, chief financial officer Charles Asubonten explained that the company was considering this move to take advantage of surging prices. Over the past six years iron-ore prices have been boosted by rising demand led by steelmakers in China – the world’s biggest maker of the alloy
Palabora – controlled by Anglo American Plc and the Rio Tinto Group – already supplies 2Mtpa of magnetite to China Minmetals Corporation – the Asian nation’s largest metal trader. A three-year supply agreement was signed in 2006.
“We have the capacity to increase our supply to 10 million tons annually because we have 240 million tons-plus of magnetite reserves,” Asubonten told Bloomberg News. The magnetite reserves contain 60 percent iron.
“Iron-ore prices being where they are today, it’s a viable project,” he added. “If we get into this hard and heavy, it will be in 2009, and the expansion will cost between US$500 million R4 billion) and US$1 billion (R8 billion),” Asubonten pointed out.