October 11, 2008

Palabora may build pipe to export iron ore

Reuters reported that South Africa's Palabora Mining Company hopes to start building a pipeline in 2009 to pump magnetite to a port in Mozambique, to export its stockpiles of the low grade iron ore to booming China.

As per report the firm is doing a feasibility study on a 300 kilometre pipeline from its mine in Phalaborwa to the Port of Maputo that would enable it to export its 240 million tonnes of magnetite a byproduct of its copper mining in greater volume.

Mr Charles Asubonten CFO of Palabora Mining on the sidelines of a mining conference in Singapore said that "No pun intended it's a gold mine we didn't have to dig for.”

He said that the magnetite slush is made up of between 56% and 60% of iron ore, needed for making steel that is seeing strong demand from China. Iron ore term prices have risen fivefold since 2001.

Palabora is one of the South Africa's largest copper miner with a market cap of USD 749 million, is now 58% owned by the world's second largest miner Rio Tinto and 17% owned by the fourth biggest mining group Anglo American Plc.