Kobe Steel seeks Aussie iron ore

Bloomberg

Kobe Steel Ltd. will invest ¥25 billion in an iron ore project in Western Australia to secure supplies of the steelmaking ingredient.

Japan’s fourth-largest mill said it will indirectly own 9.9 percent of the Southdown mine, which is 70 percent held by Grange Resources Ltd., Australia’s largest iron ore pellet producer. Kobe Steel will take a 33 percent stake in a Sojitz Corp. unit that holds a 30 percent stake in the mine, it said Thursday.

Steelmakers including Kobe Steel and ArcelorMittal, the world’s largest, are looking to secure iron ore and coking coal resources as increasing purchases by China and India tighten global supplies. The Southdown mine is slated to produce about 10 million metric tons of magnetite pellets a year starting in 2015.

Kobe Steel said it agreed with Sojitz to acquire 1.5 million tons a year from the mine, located 90 km northeast of Albany Port.