Magang Holdings Co, which owns China`s second-biggest Hong Kong-listed steelmaker, has got government approval to spend Yu1.1 billion (US$142 million) on the Rohe sulphur and iron ore mine to replace its existing sites which are low on reserves.
The mine is expected to produce 3 Mt/y of minerals, including 983,100 t of ore with 66% iron content, and 306,000 t of minerals that contain 40% sulphur, according to the National Development and Reform Commission in a statement.
The company, based in Maanshan in China`s eastern province of Anhui, is the nation`s seventh-biggest steelmaker by 2006 output, and like other mills is speeding up iron ore exploration to cut reliance on imports as Chinese demand has driven global contract ore prices to records.
The statement added that Magang`s existing iron ore mines will be closed down in three to five years as reserves are depleted. Chinese ore contains on average 33% iron – about half the content found in Australia.
Shares of Magang`s Hong Kong-trade unit, Maanshan Iron and Steel Co, increased 4.3%, the first gain in four days, to HK$5.05/share and reflecting an 82% boost in the past year.