Red-chip conglomerate Citic Pacific has launched a A$5.2 billion (HK$35.8 billion) iron ore mining project in Western Australia where a battle for the commodity's supply is heating up.
The mainland's newly formed investment fund, China Investment Corp, was reported to have broadsided the world's largest mining conglomerate's bid to take over London-traded miner Rio Tinto. CIC has since denied the report.
Citic Pacific owns 80 per cent of the Australian project while China Metallurgical Group, a state-owned construction contractor, holds the balance. The latter also will be responsible for the building work.
Launching the Sino Iron project at Cape Preston, 100km southwest of Karratha in the Pilbara region yesterday, Citic Pacific chairman Larry Yung Chi-kin said the group would start building processing and support infrastructure next year, pending government approval.
He expects the mine to export 27.6 million tonnes of a mix of high-grade iron pellets and concentrates annually over 25 years to Citic steel mills in Jianyin in Jiangsu; Huangshi in Hubei and Shijiazhuang in Hebei, with excess production to meet needs of third-party steel mills.
'This project is very significant for our company because it will deliver an integrated steel business during a time of advancing economic development in China,' Mr Yung said.