bci says chinese steel mill interest strong

BC Iron says Chinese steel mill interest strong

KALGOORLIE, Aug 4 AAP
August 04 2009, 12:18AM
BC Iron Ltd says it received strong interest from steel mills for its sinter-friendly iron ore, during a roadshow in China last week.

Managing director Mike Young says samples from the junior explorer's Nullagine joint venture with Fortescue Metals Group Ltd in Western Australia's Pilbara region had been welcomed by Chinese steel mills due to its low alumina, ultra-low phosphorous qualities.

The first step in steelmaking is to process iron ore to make sinter, or pellets, which is then fed to a blast furnace, which converts the pellets into molten iron.

"We will get the Hamersley Iron benchmark price for this ore," Mr Young told the Diggers and Dealers mining conference at the historic gold mining town of Kalgoorlie on Tuesday.

"At (a price of) $US60 a tonne, the project is fine."

Mr Young said Fortescue and BC Iron each would contribute $10 million to develop the $35-$50 million Nullagine project, with the remainder of project financing expected from Chinese steel mills through pre-sales.

"It looks like funding for the project is on its way to being secure," he said.

The joint venture plans to begin a trial pit in mid-September and is targeting initial production of 1.5 million tonnes per annum (Mtpa), which eventually would be ramped up to 5Mtpa after roads are constructed linking the mine to Fortescue's railway line.

BC Iron and Fortescue formalised their joint venture last month. Under the arrangement, Fortescue has acquired a 50 per cent stake in the Nullagine project in return for providing rail haulage, port handling and ship loading facilities.

Exports are scheduled to commence in mid-2010.

http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2009/8/216/catf_090804_121800_7667.html