Marubeni, POSCO to Get Interest in Roy Hill Iron Ore Project

Marubeni Corporation announced on Friday the firm, POSCO and South Korean shipbuilder, STX Corporation agreed to acquire 30% interest in Roy Hill iron ore project in Pilbara, West Australia from Australian mining company, Hancock Prospecting. The companies pay 3.5 billion Australian dollars for the acquisition. They develop Roy Hill iron ore mine with annual 55 million tonnes of production capacity for around A$ 9.5 billion starting operation in 2014. Marubeni Corporation gets certain interest in iron ore project for the first time in around 30 years. The Japanese major trading firm seeks stable iron ore supply for Japan and potential expansion of the business.

POSCO gets 15% interest in Roy Hill project. Marubeni Corporation has 12.5% and STX Corporation 2.5% interests in the project while Hancock Prospecting controls 70% of the project. Marubeni Corporation plans to supply 12.5% of the production for Japanese buyers from the mine to produce high grade ore with 61% Fe.

The open pit iron ore mine, Roy Hill will produce the largest volume of iron ore as single mine in Pilbara. The project with approvals from the authority already started the development to build own harbor facilities at Port Hedland and 342 kilometers railway from the mine. The project plans to keep the operation for around 28 years based on 2.323 billion tonnes of resource.

Marubeni Corporation had 6.2% interest in Hamersley iron ore mine, which is currently controlled by Rio Tinto. But the Japanese trading firm sold the interest in 1984. The firm targeted re-entering the iron ore business while the firm has near 1% interest in Brazilian mine, MBR. The trading firm will have near 7 million tonnes per year of iron ore interest through the Roy Hill development.