TOKYO, March 15, 2012 – Kobe Steel, Ltd. announces that it reached agreement with trading firm Sojitz Corporation to take a 33% equity share in Sojitz Resources & Technology Pty Ltd, currently a 100% owned subsidiary of Sojitz Corporation.
Sojitz Resources & Technology and Grange Resources Limited are conducting a Definitive Feasibility Study for Australia’s Southdown Project. Sojitz Resources & Technology has a 30% stake in the project. By acquiring shares in Sojitz Resources & Technology, Kobe Steel will indirectly hold a 9.9% interest in Southdown.
The Southdown Project is a new iron ore project, which will produce magnetite pellet feed. This is pulverized magnetic iron ore, highly suitable for processing into pellets. The Southdown magnetite deposit is located approximately 90 kilometers northeast of the Port of Albany on the south coast of Western Australia. The project proposes to produce 10 million metric tons per year of premium magnetite pellet feed with about 69% iron content. First shipment is expected in 2015. The total cost of the project is estimated to reach approximately 250 billion yen.
In addition to acquiring shares in Sojitz Resources & Technology, Kobe Steel agreed with Sojitz Corporation to offtake 1.5 million metric tons per year of the magnetite pellet feed produced from the Southdown magnetite deposit. This will contribute to stable operation and cost reductions at the Pellet Plant at Kobe Steel’s Kakogawa Works.
In the future, high-grade iron ore will decrease and iron ore prices are forecast to remain high. By participating in this project, Kobe Steel will be able to further increase its iron ore interests. This will help Kobe Steel secure necessary resources and increase the competitiveness of its steel business.
| Equity share: | Grange Resources 70%, Sojitz Resources & Technology 30% |
| Location: | Southern Western Australia (90 km northeast of the Port of Albany) |
| Product: | Magnetite pellet feed |
| Production volume: | 10 million metric tons/year |
| Development plan: | Production to begin in 2015 |
| Shipping port: | Port of Albany |
| Name: | Sojitz Resources & Technology Pty Ltd (Name to change after Kobe takes equity) |
| Equity share: | Sojitz Corporation 100% (After Kobe’s equity participation: Sojitz 67%, Kobe Steel 33%) |
| Location: | Perth, Western Australia |
| Managing Director: | Miki Akai |
| Business: | Holds 30% equity share in the Southdown Project |
| Name: | Grange Resources Limited |
| Equity share: | Listed on the Australian Securities Exchange |
| Location: | Perth, Western Australia |
| Managing Director: | Russell Clark |
