Asia-Pacific’s richest woman is gearing up to start shipments from her $10 billion iron ore project in Australia. Even with prices at 10-year lows, she’s displaying no lack of confidence in the mine’s success.
Billionaire Gina Rinehart’s ace? Her mine isn’t relying solely on sales to China, the biggest iron ore buyer. This limits the project’s exposure to a market where steel demand is judged to be peaking. Instead, she’s locked in supply contracts with three of the largest iron ore consuming Asian nations outside of China.
“They feel very confident. Roy Hill has a massive advantage in that it has diversified its markets,” Philip Kirchlechner, Perth-based director of Iron Ore Research Pty. said by phone. “They have buyers from three of the other major iron ore importing markets.”
Roy Hill, Australia’s largest single iron ore mine, is on track to commence exports from September, adding 55 million tons a year of output to a market already saturated by a growing surplus. It’s even accelerating the mine’s schedule, seeking to hit its planned capacity at the fastest pace of any project built in Western Australia’s iron-rich Pilbara region.
Her partners, South Korea’s Posco, Japan’s Marubeni and Taiwan’s China Steel have committed to take half of the mine’s annual output, Barry Fitzgerald, chief executive officer of Roy Hill Holdings Pty, said in an e-mailed response to questions.
“We also have significant commitments from steel mills across Asia for a large portion of the remaining sales volume,” he said. Posco, which has a 12.5 per cent stake, expects to begin importing about 7 million metric tons annually from Roy Hill in September, Kang Min Suk, a spokesman at Posco, said by phone on Wednesday.
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