Eurasian Natural Resources Corp., a ferroalloy producer, plans to invest $6.8 billion to increase iron-ore output in Kazakhstan and Brazil as prices for the steelmaking ingredient climb, Bloomberg reported.
ENRC, based in London, aims to become a "leading" global iron-ore miner with annual output of 70 million metric tons by 2016, Chief Executive Officer Felix Vulis said yesterday at a BMO Capital Markets conference in Hollywood, Florida. The company currently mines iron ore only in Kazakhstan, where its annual production is 17 million saleable tons.
Mining companies are boosting investment in reserves of iron ore and coal, both used to make steel, as Asian demand drives up prices. The price of iron-ore imports to China, the world's largest consumer of the raw material, jumped 70 percent last year, while European benchmark coal rose 38 percent in London, according to data compiled by Bloomberg.
ENRC's investment program includes $2.1 billion to expand iron-ore operations in Kazakhstan, where the company plans to increase output to 23 million tons by 2015, according to Vulis's presentation. ENRC earmarked the same amount for its Bahia Mineracao Ltda project in Brazil, due to begin production in 2013 with an annual capacity of 19.5 million tons, he said.
In September, ENRC bought the shares it didn't own in Bahia Minerals BV and won an option to purchase Greystone Mineracao do Brasil Ltda.
ENRC will also invest $2.6 billion to develop Brazil's Jiboia iron-ore site. The company plans to begin construction in 2013 and produce 25 million tons of ore a year by 2016, according to the presentation.