Vale May Spend $5B to Develop Simandou, Guinea Project
Vale SA may spend USD 5 billion to develop Simandou project
Wednesday, 12 May 2010
Bloomberg reported that Vale SA may spend USD 5 billion to develop the Simandou project in Guinea as it seeks to boost output of the steelmaking raw material to 450 million tonnes a year by 2015.
Mr Jose Carlos Martins head of Vale’s ferrous minerals business said that Vale expects to produce between 10 million tonnes and 15 million tonnes of ore in Guinea by 2012 and 50 million tonnes by 2015.
Vale is boosting output and buying assets as demand for iron ore soars from Chinese steelmakers. The company said that it expects the market to be very tight for the next six months and this year is starting a 20 million tonne expansion at its Carajas mine.
Mr Rodrigo Ferraz analyst at Brascan Corretora said that “The iron ore market should stay tight, from the perspective that there’s no significant increase in supply in the short term and that the big miners are operating close to full capacity.”
Vale is building a fleet of ships to create a shuttle service between Brazil and China and also building distribution centers in the Middle East and Asia to challenge BHP and Rio, whose iron ore mines in Australia are closer to China. Vale’s share of the seaborne market dropped to about 25% in 2009 as compared with 30% a year earlier, because of reduced demand in Europe and Brazil.
(Sourced from www.bloomberg.net)