Moly Mines secures bright future with diversification into iron ore

The mainland's continuing urbanisation ensures steady iron ore demand this year. Moly Mines is on track for this robust market with its diversification into iron ore production and the backing of its major shareholder, the Sichuan-based Hanlong Group.

With its fully permitted and engineered molybdenum prospect in the Pilbara region, Moly Mines is potentially a valuable asset in the global metals market.

Investors are closely watching developments on Moly Mines' Spinifex Ridge Molybdenum/Copper Project. Listed on the Australian Securities Exchange and the Toronto Stock Exchange, Moly Mines has acquired HK$3.8 billion in debt financing from the China Development Bank for the molybdenum prospect. It is awaiting improvement in global molybdenum prices before proceeding with additional financing required to firm up construction.

Meanwhile, the company has turned to iron ore production. In addition to molybdenum, the Spinifex Ridge prospect holds an estimated 7.3 million tonnes of 59 per cent-grade iron ore. Moly Mines started mining the resource in late 2010 and made its first export shipment in December 2010.

The company's iron ore production continues to exceed expectations, with total exports for last year estimated at one million tonnes and earnings rising strongly throughout the year.

The Australian government has forecast the country's overall earnings from iron ore exports to exceed HK$500 billion this fiscal year. This is based on steady growth in world iron ore trade mainly due to the mainland's heavy importation and rising steel consumption in developed economies. The mainland is Australia's biggest market for iron ore.