Thu Aug 9, 2012
LONDON Aug 9 (Reuters) - Commodities trader Glencore , eager to boost its slice of the iron ore market, has struck an offtake deal with Bellzone Mining, agreeing to buy its 50 percent of production from the Forecariah joint venture in Guinea.
Traders like Glencore and rival Vitol have been piling into physical iron ore alongside strategic buyers, attracted by large trading volumes, a pricing mechanism that is becoming far shorter and China's appetite for steel as it expands cities, power lines and rail links.
They are competing for space in a market dominated by Vale , Rio Tinto and BHP Billiton - which have a joint share of around 60 percent - leaving even the world's largest commodity traders to battle over offtake from emerging players.
Commercial production at Forecariah started in May and production will be ramped up through 2012 to a rate of 3 to 4 million tonnes per year, a fraction of the the 1.1 billion tonne global market.
The deal, spanning the life of the mine, includes a $15 million early payment facility after the first five ship loads - 750,000 wet metric tonnes - are sold. It envisages first export early in the fourth quarter this year.
Bellzone's flagship project is the Kalia Mine, also in Guinea, which plans to produce 46 million tonnes of oxide iron ore and iron ore concentrate in 2020. That mine is due to start iron ore production in 2015.
LONDON Aug 9 (Reuters) - Commodities trader Glencore , eager to boost its slice of the iron ore market, has struck an offtake deal with Bellzone Mining, agreeing to buy its 50 percent of production from the Forecariah joint venture in Guinea.
Traders like Glencore and rival Vitol have been piling into physical iron ore alongside strategic buyers, attracted by large trading volumes, a pricing mechanism that is becoming far shorter and China's appetite for steel as it expands cities, power lines and rail links.
They are competing for space in a market dominated by Vale , Rio Tinto and BHP Billiton - which have a joint share of around 60 percent - leaving even the world's largest commodity traders to battle over offtake from emerging players.
Commercial production at Forecariah started in May and production will be ramped up through 2012 to a rate of 3 to 4 million tonnes per year, a fraction of the the 1.1 billion tonne global market.
The deal, spanning the life of the mine, includes a $15 million early payment facility after the first five ship loads - 750,000 wet metric tonnes - are sold. It envisages first export early in the fourth quarter this year.
Bellzone's flagship project is the Kalia Mine, also in Guinea, which plans to produce 46 million tonnes of oxide iron ore and iron ore concentrate in 2020. That mine is due to start iron ore production in 2015.
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