PROME R tOt9STER
FOR MEDIA 30 JUNE 1987
During my visit to China in February 1984 1 outlined the
basic elemonts of an initiative to engage Australian and
Chinese fi. emsm ore closely in the massive expansion of the
Chinese irc and steel making industry which is currently
underway.
Among otheT things that led in August 1984 to an agreement
to undertake a feasibility study into a joint venture mine
at Mt Channaro
I am happy to be able to announce today that almost three
years of patient investigation and negotiation have now
borne fruit.
As I speakt our Ambassador, Dr Garnaut, and senior Chinese
officials led by the Minister for Metallurgical Industries,
Mr Qi Yuanjing, and the Vice Chairman of the State Planning
Commission, Liu Suinian, are witnessing in Beijing the
initialling of a joint venture agreement between the China
Metallurgical import and Export Corporation ( CMIXEC) ( the
trading am of the Ministry of Metallurgical Industry) and
Channar Hfning Pty Ltd, a wholly owned subsidiary of
Hamersley Iron. Hammersley's equity will be 60 per cent,
with the remainder held by the Chinese partner.
The agreement will lead to a substantial investment
( initially about $ 250m) to develop a new ore body of some
200 million tonnes in the Pilbara region.
The new mine will produce high grade ore for export, which
will be wholly taken by CMIEC for use in China. When fully
operational some 10 million tonnes per annum will be shipped
to China, valued at about $ 200m a year at current prices.
Channar ore will be blended with iron ore from existing
Hamersley operations to provide ore similar to current
production. Maximum use will be made of the existing Hamersley
infrastructure.
An important element of the agreement has been undertakings
given by Hamersley to guarantee performance and continuity
of supply.
This will be the first joint venture investment in an iron
ore mine by the Chinese.
It represents a major show of confidence by the Chinese in
the Australian iron ore industry.
it will lead to the opening of a new mine with an assured
market in an otherwise highly uncertain world trading
environment. It provides Australia with a unique opportunity to build
upon the already good relations with China in the area of
iron and otoel cooperation to participate in the burgeoning
growth of China's iron and steel industry.
China is seeking to raise its current output of steel from
56 million tonnes in 1986 to over 90 million tonnes by the
year 2000. China's involvement with the Channar przoject
will help to open the door for other mineG and other
producers to export.
This new joint venture arrangenent is yet another indication
of the benefits which can be had by Australia from seeking
to exploit wiore fully the geographic and competitive
advantages which we have in this region.
Arrangements of this kind with Chinese enterprises are most
readily made under the auspices of an appropriate government
to governmont relationship.
Today's in-' tialling represents the culmination of 3 years
work by our two governments and, particularly, by the
parties principal.
I wish to record my personal thanks to Premier Zhao Ziyang
for his efforts in taking forward the commitments which we
made to the iron and steel initiative in 1984 and which we
renewed in M'ay last year.
I also wish to congratulate Hamersley iron for their,
perseverance and wish them every success.