Kobe Steel Seeks Better Cost, Stability of Raw Materials Position

Kobe Steel tries to improve raw materials procurement with originality for the operation status. The firm secures pellet feed stably from Australian new project through the participation in the project while the firm increases the captive iron ore. The firm eyes potential resource investment through cooperation with direct reduced iron projects based on the original technology. The firm tries to improve the competitiveness from transport to consumption of raw materials through across the board efforts.

The executive officer Michihide Iwasa, who is in charge of raw materials procurement, said the firm utilizes Japanese only pellet plant at Kakogawa works to improve the raw materials procurement when the firm has own technology to use certain volume of Australian pellet feed.

The firm expects the project can start construction in the year to develop Southdown iron ore deposit. The firm secures around 10% of interest in the project while the firm imports maximum 1.8 million tonnes of magnetite pellet feed per year from the mine when the mine starts operation in 2015.

The firm expects the pellet feed with maximum 69% of Fe contributes to higher productivity of pellet plant at Kakogawa. The firm also expects better freight cost by replacing a part of sourcing to nearer Australia when the firm imports annual more than 4 million tonnes of pellet feed mainly from South America.

The firm expects iron ore sourcing from mines with the interests increases from current 7% to around 20% of annual 13 million tonnes of requirement by adding Southdown source. The firm targets 30% of the rate in longer term through additional investment. The firm also tries to add captive coal assets in long term activity.