Citic Pacific Mining is set to ship its first consignment of iron ore from its Sino Iron mine in Western Australia later this year after spending US$636 million on a fleet of 12 dry bulk cargo ships.
The ships are part of an estimated US$4 billion investment by Citic Pacific to develop and exploit magnetite iron ore reserves at Cape Preston, 100 kilometres southwest of Karratha in Western Australia's Pilbara region.
The shipment will be the first by a mainland mining company from its own iron ore mine located in Western Australia.
Citic has the rights to mine two billion tonnes of magnetite, which has a higher iron content than other ores and is used to make special steels for industries including automotive components, plant manufacturing, shipbuilding and power generation.
It also has the option to acquire an extra four billion tonnes of magnetite reserves, and is among a growing band of industrial shipowners, that include several mainland power companies, to invest in their own shipping fleets.
One shipbroker said: 'Citic Pacific can more accurately control its transport costs by investing in its own fleet rather than be left to the mercy of a volatile chartering market.'