CITIC Pacific's project delayed for 2nd time
Source: Bloomberg News |
August 17, 2012, Friday
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Print Edition
Print Edition
CITIC Pacific Ltd, the Chinese company building the world's largest magnetite iron ore mine, said it has delayed production for at least the second time, hindered by Australia's safety standards and labor shortages.
Trial production will start in November instead of later this month, the Hong Kong-listed company said yesterday in a statement. Difficulties include strict commissioning requirements in certification and safety standards, and a lack of technicians, it said.
CITIC Pacific's US$8 billion Sino Iron project has been beset by problems, including a more than four-fold blowout to the budget and currency hedging that cost HK$14.6 billion (US$1.9 billion). The mine, being built by China Metallurgical Group Corp, was originally slated to begin output in the first half of 2011.
"It's a huge project and difficulties in planning, construction and transportation are well beyond our original preparation," CITIC Pacific Chairman Chang Zhenming said in Hong Kong yesterday. The total cost for the mine will be less than US$10 billion, he said. The company had spent US$7.8 billion on the mine by the end of June, Managing Director Zhang Jijing said yesterday.
Cost of the Sino Iron project has risen to about US$8 billion, Rob Cory, a spokesman for the company's Perth-based mining unit, said last month.
CITIC Pacific, the steelmaker and property group controlled by China's biggest state-owned investment company, fell 1.2 percent to close at HK$11.44 in Hong Kong. It said in July last year that it was delaying the start of the mine and costs rose 35 percent more than expected.
"The commissioning process for an iron ore mine in Australia is very different from that in China," CITIC Pacific said in the statement.
China Metallurgical Group Corp "is responsible for the processing area, which remains the primary cause of the delay," it said.
Australian mining magnate Clive Palmer sold the rights to the project to CITIC Pacific in 2007 for US$200 million.
Trial production will start in November instead of later this month, the Hong Kong-listed company said yesterday in a statement. Difficulties include strict commissioning requirements in certification and safety standards, and a lack of technicians, it said.
CITIC Pacific's US$8 billion Sino Iron project has been beset by problems, including a more than four-fold blowout to the budget and currency hedging that cost HK$14.6 billion (US$1.9 billion). The mine, being built by China Metallurgical Group Corp, was originally slated to begin output in the first half of 2011.
"It's a huge project and difficulties in planning, construction and transportation are well beyond our original preparation," CITIC Pacific Chairman Chang Zhenming said in Hong Kong yesterday. The total cost for the mine will be less than US$10 billion, he said. The company had spent US$7.8 billion on the mine by the end of June, Managing Director Zhang Jijing said yesterday.
Cost of the Sino Iron project has risen to about US$8 billion, Rob Cory, a spokesman for the company's Perth-based mining unit, said last month.
CITIC Pacific, the steelmaker and property group controlled by China's biggest state-owned investment company, fell 1.2 percent to close at HK$11.44 in Hong Kong. It said in July last year that it was delaying the start of the mine and costs rose 35 percent more than expected.
"The commissioning process for an iron ore mine in Australia is very different from that in China," CITIC Pacific said in the statement.
China Metallurgical Group Corp "is responsible for the processing area, which remains the primary cause of the delay," it said.
Australian mining magnate Clive Palmer sold the rights to the project to CITIC Pacific in 2007 for US$200 million.
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