RECENT IRON ORE ACQUISITIONS

摘要

The iron ore industry has been growing since mid-2001, and based on the first eight months of 2005, it looks like mine production, demand, and prices are set to reach record levels for the third year in a row. As illustrated in the graph below, even though mine production increases have averaged more than 6 percent annually since 2001, production has not kept up with demand in the last few years. According to recent reports, China's demand growth has averaged more than 9 percent since 2000, while in the rest of the world, demand growth has averaged 3 percent. Since 2000, China has experienced a domestic iron ore supply deficit averaging 137 million mt/y, which it has met through imports, especially from Australia. In the last few years, steelmakers in China and elsewhere have become increasingly interested in acquiring iron ore projects to meet some of their iron ore needs, rather than depending solely on a market in deficit. One of the first Chinese steel companies to establish iron ore mining joint ventures was China's largest steelmaker, Shanghai Baosteel Group (Baosteel), which entered two deals in 2001 -one with CVRD in Brazil at Baovale, and the other with Hamersley in Australia at Eastern Ranges. By sharing capital costs for new mine developments and committing to iron ore purchases of 6 million mt/y from CVRD and 10 million mt/y from Hamersley, Baosteel secured much of its iron ore import needs over the medium term.