hebei steel seeks to finance aurox project, page-10

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China Hebei Steel seeks to finance Aurox project
Friday, Oct 24, 2008
Chinas state-owned Hebei Iron and Steel Group is in early talks with Australian iron ore prospector Aurox Resources (AXO.AX: Quote, Profile, Research, Stock Buzz) to finance the Auroxs 6-million-tonne iron ore project, the Australian miners managing director said on Thursday.

""We met with Hebei Iron and Steels president yesterday,"" Charles Schaus told Reuters on the sidelines of an industry conference, but he declined to disclose more details because he said negotiations were at an early stage.

Schaus said talks with Hebei Iron and Steel had progressed slowly due to its state-owned nature and global recession fears.

""It takes a longer time for them to make a decision,"" Schaus said, ""and they said they are going slowly now due to the market"".

In May, Chengde Iron & Steel Group, now part of the Hebei Iron and Steel Group, held talks to buy a stake in Aurox but that did not result in a deal.

Hebei Iron and Steel Group was formed in June through the merger of Tangshan Iron and Steel Group and Handan Iron and Steel, Chinas No. 3 and No. 11 steel makers, with the aim of overtaking Baosteel (600019.SS: Quote, Profile, Research, Stock Buzz) as Chinas top steel producer.

Schaus said Aurox, the prospector with a half of billion tonnes of iron ore, will start construction early next year and expects to launch production for the project by the end of 2009.

He said the miner will have annual capacity of 6 million tonnes of iron ore after construction is completed.



Source: Reuters