Sabic considers buying iron ore mines overseas

08 April 2008
Saudi Basic Industries Corporation (Sabic) is looking to acquire iron ore mines overseas in an attempt to limit the impact of rising iron ore prices on its steel production unit.

A source close to the company has confirmed that Sabic hopes to proceed with investments in iron ore mining, but declined to give more details.

Saudi Iron & Steel Company (Hadeed) is Sabic’s steel making affiliate.

In 2007, Sabic signed a memorandum of understanding with Sphere Investments and Mauritania’s Societe Nationale Industrielle et Miniere to develop Mauritania’s Guelb el-Aouj mine and iron ore pelletising project. However, the company pulled out of acquiring a 34.9 per cent stake in the project later in the year.

Qatar Steel Company, which was already planning to buy a 15 per cent stake in the project, raised its stake to 49.9 per cent as a result.

Brazilian iron ore producer Vale announced an 86.7 per cent increase in the price of iron ore pellets in early April, following the conclusion of negotiations with four Middle Eastern steel makers.

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