For all CFR holders I believe it’s important to profile the company’s current initiatives in particular the proposed Indian iron ore joint venture. Details from previous posts (hope you don’t mind sparkler) have been used to compile this information which is designed to benefit existing holders and potential new investors.
Proposed Indian Iron Ore Lease- Kanartaka Region
* The Karnataka region boasts India's largest iron ore reserves which is estimated to be about 9.03 billion tonnes averaging 60% Fe * Karnataka region is known to produce high quality ore types such as super and basic grade lumps, calibrated ore, high grade and low grade fine and high density iron aggregates * Proposed lease of 2500 acres lies within this world renowned region * Karnataka is located on the east side of the country and is not adversely affected by the south west monsoon and hence ore can be shipped throughout the year- close proximity to the Port of Chennai and Mormugao Port
Politics
* Lease holders must be Indian based, and the Indian Central Government understand they need companies with expertise in mineral processing to reap any rewards for their country. * The state govt of Karnataka are also cracking down on the black market because of their lack of value for environment and treatment of mine workers * India want Western methods to extract large mineral deposits, but still want Indian based ownership. That’s why these Joint Ventures between Indian/Australian companies are receiving more and more approvals and will only improve Australian/Indian ties * India has a huge demand for Iron Ore which enables a quick turn around time on licensing requirements * Inexpensive labour costs and cheap extraction costs
Global Demand for Iron Ore
* Steelmaking companies are now investing in iron ore mines and in particular are targeting India. They are doing this to beat the iron ore price rises and to take a share in this valuable commodity * China and India has a huge demand for iron ore which is expected to last for decades * Last week iron ore experienced an 85% price increase
Upcoming Announcements
* AusIMM will be compiling an iron ore valuation report on the proposed lease which is due early July * A decision needs to be made regarding the proposed iron ore joint venture within the next 4 weeks * Little Bygoo Tin Project- 9 remaining tin assay results due early July * Egerton Gold Project- drilling update expected between 1 and 3 weeks
Other Facts
* 1.68 billion shares issued with the top 20 holding 50% * Several Indian holders in the Top 20 * The CFR team mentioned they were interested in fast tracking the Indian iron ore joint venture- once they confirm their involvement this will open the doors to other projects in India
Quotes
"Karnataka is endowed with rich deposits of iron ores; with approximately 9.03 billion tonnes or about 41% of India’s estimated total haematitic and magnetitic iron ore resources”
"Wherever you stretch your eyes, you see ore," says B. Chidamber, a retired engineer from the Karnataka Department of Mines and Geology (DMG). "It's all ore. No dust at all. Just blast it, load it."
http://www.mmpindia.org/minenews/miningfrenzy.htm
"We haven't seen the end of what is happening to China and India hasn't even started yet," Mr Rowley said.
ArcelorMittal has a goal of being 75% iron ore self-sufficient and plans to double its iron-ore supplies by 2012. The world's largest steelmaker is developing iron-ore mine projects in India, Liberia and Senegal, says Louis Schorsch, president and CEO of flat carbon in the Americas. "It's an advantage for us that we're roughly 50% self-sufficient because the higher the iron-ore price goes up the bigger that advantage becomes," Schorsch said in a Reuters report, predicting a 30–35% increase in iron-ore prices in 2008.
http://www.purchasing.com/article/CA6518803.html
JB
CFR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
