BEIJING (Commodity Online): China chooses West Africa as the perfect spot for their Iron ore hunt. Many Chinese firms had signed number of deals in Africa.
China wants to reduce the dependency over the three companies which dominate the iron ore market (BHP Billiton, Rio Tinto and Vale) and also to detain the price hike. About 85% of the countries need for iron ore in steel industries comes from Australia, Brazil, India and South Africa.
In 2010-11, China imported 618 million tons of iron ore and most of them were supplied by BHP Billiton, Rio Tinto and Vale.
With the projects in West Africa, China could produce up to nearly 250 million tons of ore annually in the medium to long term.
The major deals are Rio/Chinalco - Simandou joint venture project in Guinea, Bellzone/China investment fund - Kalia in Guinea, CMEC - Belinga project, Gabon.
"These projects have little chance of displacing production from the major producers such as Rio, Vale and BHP, who are so far ahead in terms of infrastructure, capital expenditure and quality of resources," said John Meyer, a mining analyst at investment bank Fairfax was quoted by The African Report as saying.
