evraz buys 75pc econ interest in cape from mcc, page-9

Evraz, China Metallurgical to Develop Iron Ore Mine (Update1)

By Mark Herlihy

July 31 (Bloomberg) -- Evraz Group SA, Russia's second- largest steelmaker, agreed with China Metallurgical Group Corp. to jointly develop the Cape Lambert Iron Ore project in Western Australia.

The Russian steel producer will take a 75 percent stake in the project, which has a projected annual output of 15 million metric tons of magnetite concentrate, the company said today in a statement. Ore from the mine in the Pilbara region will be shipped to China.

Evraz, whose controlling shareholders include Russian billionaire Roman Abramovich, has built up a 19 percent stake in Cape Lambert Iron Ore Ltd., the company that owns the project of the same name. The Australian Financial Review said July 21 Evraz may make a bid for Cape Lambert Iron Ore. A week later, investors in the Australian mining company approved its sale to China Metallurgical.

Iron ore prices have increased for a sixth successive year. Cia. Vale do Rio Doce, the world's largest producer, said in February it agreed to price increases of as much as 71 percent with Asian and European customers.

To contact the reporter on this story: Mark Herlihy in London at [email protected].
Last Updated: July 31, 2008 04:02 EDT