MCC to tap Philippine iron ore mine

June 26, 2008

June 26th (Interfax China) – China Metallurgical Group Corp. (MCC) expects to complete its talks with the Philippine government over the development of an iron ore mine on Mindanao Island in August, an MCC official told Interfax today.

“MCC is discussing with various Philippine government departments and local communities specific details of the iron ore mine investment, particularly exploration licenses and investment incentives,” an MCC official familiar with the project, surnamed Yu, said.

MCC signed a Memorandum of Understanding last week with the Philippine company LUPA to jointly develop the mine.

“MCC intends to develop the iron ore mine first, and follow it with a steel mill near by,” Yu said. However, he declined to give any information on the project’s planned capacity or investment figures, or comment on recent Philippine media reports.

According to a report in The Philippine Star last Friday, Environment Secretary of the Philippines Joselito Atienza said that MCC would initially invest RMB 10.30 billion ($1.5 billion) in developing an ore processing plant for the Mindanao Island mine project.

Yu said that local mineral resources and cheap labor in the Philippines are the main reasons for MCC’s interest in the project, and that in the future it may seek to develop other mineral resources in the country, such as nickel.

Surging iron ore prices in recent years have prompted China, the world’s largest iron ore consumer, to expedite development of overseas iron ore resources. MCC recently acquired the Australian Cape Lambert iron ore project for AUD 400 million ($383.90 million), which is currently undergoing a feasibility study for a production expansion project.

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