19 July 2007
Dubai: Steelmakers in the Gulf and the wider region will start receiving iron ore for their plants from Mauritania in 2010, a company with mining interests in the West African nation said.
Sphere Investments, an Australian-listed company 18.4 per cent owned by Saudi steel firm Hadeed and Qatar Steel, aims to export seven million tonnes a year of high grade direct reduction iron ore pellets from 2010 to the Middle East and North Africa to produce steel.
"We have proven reserves of 472 million tonnes to mine over a period of 33 years. Mauritania will help steel producers in the region in diversifying their sources of iron ore," Sphere managing director Alexander Burns said.
To establish a long-term presence and tap vast liquidity in the region, Sphere has listed on the Dubai International Financial Exchange. It is the fourth mining company to list shares on the bourse. Sphere is an equal partner with Mauritania's iron ore producer Societe Nation-ale Industrielle et Miniere in the iron ore pellet project.
Investments
Both companies signed a pact with Saudi Basic Industries Corporation (Sabic), Hadeed's parent, and Qatar Steel Company in March this year to develop the Guelb Al Aouj project as part of a new iron and steel consortium.
Sabic and Qatar Steel will acquire 34.9 per cent and 15 per cent stakes respectively in the company being set up for the $1.5 billion iron ore mining project.
The planned investments are subject to findings of a project feasibility study due in October.
Iron ore prices are expected to remain strong in the long term because steel consumption is growing in China and India.
Prices have been steadily rising since 2003 and are expected to rise 25 per cent by 2008, Burns said. In 2005, iron ore prices soared 71.5 per cent due to high demand in China, which has seen its imports rising to 450 million tonnes a year from just 50 million a few years ago.
By Shakir Husain
Gulf News 2007. All rights reserved.
