CITIC bucks the trend

03/12/2008 - 22:00

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CITIC Pacific Mining is on the recruitment drive for 100 workers across a variety of roles in a bid to get its Sino Iron magnetite project at Cape Preston in production by 2010.

CITIC bucks the trend

CITIC Pacific Mining is on the recruitment drive for 100 workers across a variety of roles in a bid to get its Sino Iron magnetite project at Cape Preston in production by 2010.

While mining giant Rio Tinto said it had put the brakes on spending in the Pilbara and Fortescue Metals Group instructed contractor NRW Holdings to defer works on the half-complete Cloudbreak rail line, the CITIC move has injected some confidence back into the embattled iron ore sector.

A CITIC spokesperson said the Sino Iron project was a viable and ongoing project with funding secured, contractors on board, customers lined up and a skilled team ready to deliver the project.

"With about 75 per cent of capital expenditures committed, the project is the most advanced magnetite development in Western Australia," they said.

BHP Billiton last week approved the Rapid Growth Project 5, committing to a $US4.8 billion capital investment on infrastructure on mines and additional port and railway facilities.

The mining giant will increase installed capacity across its WA iron ore operations by 50 million tonnes to 205mt per annum, with RGP5 expected to deliver first production in the second half of 2011.

"The expansion also underscores our belief that the high-quality West Australian iron ore with close proximity to China and the Asian markets, is an important source of supply," BHP Billiton chief executive of ferrous and coal Marcus Randolph said.

Gindalbie Metals is a third company company proceeding with a big iron ore project. It received a boost to its balance sheet last month when it accepted Chinese steelmaking giant AnSteel's offer to subscribe for $162 million in Gindalbie shares at 85 cents a share.

Gindalbie chairman George Jones said the money would be used to make the final equity contribution to its joint venture to develop the $1.8 billion Karara Iron Ore Project in the Mid West.

Meanwhile, Rio Tinto will defer aspects of its planned iron ore expansion and is terminating a $25 million accommodation construction contract with East Perth-based Fleetwood Corporation.

Although it will continue with studies on port works and rail lines, the mining giant is reviewing spending on its growth projects while the global economic downturn reduces demand and commodity prices.

Rio Tinto has already trimmed its Pilbara iron ore production, and is reviewing plans to increase output of the bulk commodity from the region to 320mt by 2012.

The company expects to ship up to 175mt of iron ore this year, down 10 per cent on its previous estimate, in response to slowing demand by Chinese steel mills.

FMG is revising its shipping tonnage rate to between 15mt to 16mt for calendar 2008.

This week FMG shares leapt 40 per cent to a high of $2.93 with more than 33 million shares changing hands, which is thought to have been caused by rumours the miner could be a takeover target.

Premier Colin Barnett has delayed the deadline to finalise development agreement with the proposed builder of the deepwater Oakajee port north of Geraldton, in the WA government's attempt to secure funding from the federal government for the $1.8 billion project.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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