Sinosteel making losses from overseas businesses

State-owned Sinosteel Corporation refused to comment Thursday on a report about losses incurred at its overseas businesses, but experts said it was another case of Chinese companies failing to conduct due diligence when looking for opportunities abroad.

Sinosteel's three major overseas projects, two in Australia and one in Africa, are facing huge difficulties in either mining or sales, and the investments by the country's second biggest iron-ore trading company have generated zero returns, Shanghai-based newspaper China Business News reported Thursday.

Sinosteel's press department refused to comment when contacted by the Global Times Thursday, and Luo Yongjun, deputy general manager of Sinosteel Mining Co, told the Global Times that he was unable to say anything about it.

In 2008, Sinosteel paid $1.4 billion to buy Australia's Midwest Mining, expecting to mine more than 30 million tons of iron ore annually.

"But most of the iron ore turned out to be magnetic, which meant the company had to increase its spending on magnetic separation," Zhang Lin, an analyst with Beijing-based Lange Steel Information Research Center, told the Global Times Thursday.

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