Chinese iron ore trader Minmetals Group's ore project in Anhui province has deposit potential of up to 155 million tons worth nearly 50 billion yuan, Caijing Online reported yesterday, quoting an unnamed source from the Anhui Geology Exploration Bureau (AGEB).
The deposit, named Nihe iron ore mine, was currently under exploration, and is expected to start production in 2010, the Chinese-language magazine's website quoted the source as saying.
The exploration work on the mine started in 2007, and within two years, the total iron ore deposit was calculated at 155 million tons, Caijing Online said.
China Daily could not reach Wang Jionghui, general manger of the mineral resources department at Minmetals for a confirmation of the report.
Xu Xiangchun, a senior analyst at Mysteel, said China's mines usually contain no more than 30 percent iron ore, which means the project would be able to explore around 40 million tons of pure iron ore.
"The project is small compared to the 500 million tons of annual iron ore demand from Chinese steel mills, but with spot iron ore prices rising by the day, the new project would be a profit bright point for Minmetals," he said.
Minmetals established a joint venture with AGEB named Anhui Wuxin Mining Company in July 2007. The company has a registered capital of 85.7 million yuan, with Minmetals having a 70-percent stake in the venture and AGEB holding the rest.
"Maanshan Iron & Steel Group will get the iron ore on priority, and the price will be settled by the market benchmark," said a source from the joint venture company, declining to be named.