Mozambique Mining: Chinese investors boost Capitol Resources’ iron ore project

Iron_ore_exports_166-ab.jpgCapitol Resources, the Mozambican subsidiary of Australian group Baobab Resources is expected to sign a mining contract with the government of Mozambique for extraction and processing of iron ore in Tete province, in the centre of the country, the Mozambican Minister of Industry and Trade said on Friday in Maputo.

Daily newspaper Noticias reported that the contract was signed after a group of representatives from Chinese companies expressed an interest in processing minerals extracted in Chiúta for iron and steel production, to supply the national and regional market.

The newspaper also said that the three Chinese groups – Magang (Group) Holding Company Limited (Masteel), Shanxi Zhangze Electric Power Co., Ltd e Sinosteel Corporation, have already expressed an interest in taking part in the project, handed over by the Mozambican state to Baobab Resource under a concession contract.

Representatives of the three groups, which wished to obtain detailed information about the project, were granted an audience by minister Max Tonela, who said the project will combine the raw materials available locally and generate a low-cost product, thus reducing imports and improving Mozambique’s balance of trade.

The Masteel group is one of the 20 largest steel producers in the world, with annual production of 20 million tons, the Shanxi Zhangze Electric Power produces 10,000 megawatts of electricity per year and Sinosteel is one of the largest Chinese groups in the steel industry.

In November the Mozambican government approved a resolution authorising Capitol Resources, a subsidiary of Australia’s Baobab Resources, to carry out mining activities in the district of Chiúta. (source: Macauhub)

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