“The three mines say they are independent of each other, just as I said that my mother and I are independent of each other.†Frank Humes is not afraid to offend Vale, Rio Tinto and BHP Billiton, even though he has worked in Australia for 15 years. "I am only talking about objective facts. I work for myself. I am not a politician."
On the morning of June 3, a small meeting room at the Shangri-La Hotel, Beijing. Frank Timis, the chairman of the African mining company (AMI.LSE), who is sitting opposite, is eager to express his friendship with China and hopes to help Chinese companies break the monopoly of the three major mining companies.
Two months ago, China Railway Materials Corporation acquired a 12.5% ​​stake in African mining companies for US$280 million. The latter has 10.5 billion tons of magnetite in Sierra Leone, Africa, with an average in-situ grade of 29%. Hughes said that together with Chinese companies, a large amount of iron ore will be developed and shipped to the Chinese market, thus breaking the monopoly of the three major mining companies. To this end, he said that he would give China a big discount.
Exporting 75 million tons to China every year
"After the completion of the third phase of the project, the production capacity will reach 75 million tons, and all of these ores will be shipped to the Chinese market." Hummus said.
According to him, the first phase of production capacity started in 2011 was 5 million to 8 million tons. The second phase of production capacity starting from 2014 to 2015 was 45 million tons, and the third phase capacity was 75 million tons. Funds are already in place. Hummus expects that the second phase will require $1 billion, and the third phase will cost $4 billion.
This is like the rising star of the Australian iron ore industry FMG. A few years ago, FMG owner Andrew Forrest discovered 4.5 billion tons of iron ore resources in the Pilbara region of Australia, but the initial funding for the project required A$1.85 billion, while the FMG market value was less than 2000. Ten thousand dollars. Andrew didn't have the money to develop. He came to China to raise money with resources buried in the ground and good expectations for the future.
Hummies entered the mining industry in Western Australia at the age of 16. In the late 1990s, after working in the Australian energy industry for 15 years, Hughes returned to his birthplace in Romania and began geological surveys.
In 2008, he discovered the Tonkolili iron deposit in Sierra Leone, which proved to be the world's largest magnetite. In the second year, he obtained an exploration permit from the government of Sierra Leone and found that there were 10.5 billion tons of magnetite, with an average grade of 29%. Then he raised $130 million in the London market.
These funds are far from enough for the first phase of development. Like FMG, in order to get the money, he had to sell part of the company's shares to Chinese companies.
In addition to iron ore, the Timis Group Holdings, founded by Hummus, controlled a total of five companies, namely Africa Mining Limited, African Petroleum Ltd., International Petroleum Ltd., Green Energy Limited and London Pharmaceuticals Limited.
Among these companies, iron ore is its largest asset. Hughes realized that oil, like iron ore, is currently the world's two largest resource products. He said, "Unlike oil, iron ore is controlled by three major mining companies. If oil is also the case, it may cost $500/barrel. Of course, the world economic pattern may change."
Discounted for sale to China
Hughes said: "China Railway Materials Corporation as our shareholder, by then, his part will get a very low discount, while other parts, Chinese companies will also get a big discount."
However, he did not promise how low the discount is. “Africa mining now has a discount when it comes to it, and it’s normal, but it’s hard to give a discount at that time. It’s hard to say how much discount it can give,†an iron ore analyst told the newspaper.
“In terms of price, we are more concerned about operating costs.†Hummus said that regarding the production of magnetite, “our magnetite production cost is really very low, at around $20, which is caused by a combination of different factors. of."
According to him, because of the use of water resources, Sierra Leone's energy price is relatively low, followed by the Tangkuri iron ore mine is particularly close to the port, and the port is owned by the African mining industry.
In contrast, "their energy in Brazil is about 4 to 5 times our price, and the labor cost is 20 times ours. This is why we can reduce the cost." Hummus said that the company plans to process the ore grade. After more than 70%, it will be shipped to the Chinese market.
On the morning of June 3, a small meeting room at the Shangri-La Hotel, Beijing. Frank Timis, the chairman of the African mining company (AMI.LSE), who is sitting opposite, is eager to express his friendship with China and hopes to help Chinese companies break the monopoly of the three major mining companies.
Two months ago, China Railway Materials Corporation acquired a 12.5% ​​stake in African mining companies for US$280 million. The latter has 10.5 billion tons of magnetite in Sierra Leone, Africa, with an average in-situ grade of 29%. Hughes said that together with Chinese companies, a large amount of iron ore will be developed and shipped to the Chinese market, thus breaking the monopoly of the three major mining companies. To this end, he said that he would give China a big discount.
Exporting 75 million tons to China every year
"After the completion of the third phase of the project, the production capacity will reach 75 million tons, and all of these ores will be shipped to the Chinese market." Hummus said.
According to him, the first phase of production capacity started in 2011 was 5 million to 8 million tons. The second phase of production capacity starting from 2014 to 2015 was 45 million tons, and the third phase capacity was 75 million tons. Funds are already in place. Hummus expects that the second phase will require $1 billion, and the third phase will cost $4 billion.
This is like the rising star of the Australian iron ore industry FMG. A few years ago, FMG owner Andrew Forrest discovered 4.5 billion tons of iron ore resources in the Pilbara region of Australia, but the initial funding for the project required A$1.85 billion, while the FMG market value was less than 2000. Ten thousand dollars. Andrew didn't have the money to develop. He came to China to raise money with resources buried in the ground and good expectations for the future.
Hummies entered the mining industry in Western Australia at the age of 16. In the late 1990s, after working in the Australian energy industry for 15 years, Hughes returned to his birthplace in Romania and began geological surveys.
In 2008, he discovered the Tonkolili iron deposit in Sierra Leone, which proved to be the world's largest magnetite. In the second year, he obtained an exploration permit from the government of Sierra Leone and found that there were 10.5 billion tons of magnetite, with an average grade of 29%. Then he raised $130 million in the London market.
These funds are far from enough for the first phase of development. Like FMG, in order to get the money, he had to sell part of the company's shares to Chinese companies.
In addition to iron ore, the Timis Group Holdings, founded by Hummus, controlled a total of five companies, namely Africa Mining Limited, African Petroleum Ltd., International Petroleum Ltd., Green Energy Limited and London Pharmaceuticals Limited.
Among these companies, iron ore is its largest asset. Hughes realized that oil, like iron ore, is currently the world's two largest resource products. He said, "Unlike oil, iron ore is controlled by three major mining companies. If oil is also the case, it may cost $500/barrel. Of course, the world economic pattern may change."
Discounted for sale to China
Hughes said: "China Railway Materials Corporation as our shareholder, by then, his part will get a very low discount, while other parts, Chinese companies will also get a big discount."
However, he did not promise how low the discount is. “Africa mining now has a discount when it comes to it, and it’s normal, but it’s hard to give a discount at that time. It’s hard to say how much discount it can give,†an iron ore analyst told the newspaper.
“In terms of price, we are more concerned about operating costs.†Hummus said that regarding the production of magnetite, “our magnetite production cost is really very low, at around $20, which is caused by a combination of different factors. of."
According to him, because of the use of water resources, Sierra Leone's energy price is relatively low, followed by the Tangkuri iron ore mine is particularly close to the port, and the port is owned by the African mining industry.
In contrast, "their energy in Brazil is about 4 to 5 times our price, and the labor cost is 20 times ours. This is why we can reduce the cost." Hummus said that the company plans to process the ore grade. After more than 70%, it will be shipped to the Chinese market.
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