Hanlong to invest $5b in raw materials

09:38, May 04, 2010      

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Hanlong Mining Investment Pty Ltd, a subsidiary of Sichuan Hanlong Group, plans to invest $5 billion in steel-related materials including molybdenum, manganese and renewable energy projects in Australia, the company said on Monday.

According to the statement, Hanlong would seek a $500 million loan for the Spinifex Ridge molybdenum project by Sept 30, as part of a plan to develop the project as a major molybdenum-copper project over 25 years.

The statement was attached to a filing of Hanlong's Australian business partner Moly Mines. The Export-Import Bank of China will provide loans for the project.

Hanlong took a 55 percent stake in Australian miner Moly Mines last week and entrusted Moly to manage the molybdenum project in Australia.

Along with the molybdenum project, Hanlong is working on the engineering and design of a 10-million-ton a year output iron ore project.

Liu Han, majority shareholder of Hanlong Group, wants to "build a $3 billion to $5 billion major mining house", according to the statement.

The company is in talks to acquire and develop a number of Australian mining projects, said Liu.

Hanlong will also invest in related infrastructure to bring raw material from mines to market, to avoid supply bottlenecks on roadways, railways and at port facilities.

Sun Xiaodong, president of Hanlong, said the company is also considering investment in solar energy projects in Australia.

Based in Sichuan province, Hanlong is engaged in mining, electricity, infrastructure, pharmaceuticals, real estate, tourism and environmental technology. The company runs 25 mining projects in China, including gold, iron ore, copper and molybdenum.

Hanlong also seeks to acquire a 25 percent stake in US-based General Moly Inc, whose major mining assets include molybdenum reserves in Mountain Hope, Eureka, Nevada and Central Nevada. The two companies signed an agreement in April that Hanlong would market General Moly's products.

The company said on its website that it aims to integrate resources worldwide. The two deals are in line with Hanlong's ambition to become a world leading molybdenum miner.

Molybdenum is widely used in ferroalloy to improve its performance. The metal is also used for high-performance glass and new materials.

The Spinifex Ridge project is the biggest investment in Australia made by a private Chinese company. In 2009, State-owned Chinese miners sealed several merger and acquisition deals in Australia as commodity prices plunged in the global credit crisis.

In May 2009, China Metallurgical Group Corporation agreed to invest $3.1 billion in Australia-based Waratah Coal, followed by China Minmetals Corporation's acquisition of Australian zinc miner Oz Mineral for $1.4 billion in June 2009.

Source:China Daily


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