China pleads for WA faith

China Australia Journalist Exchange fellow Shane Wright writes for The West Australian

Published 23/11/2013

The head of a planned $3 billion Chinese-funded iron ore mine in the State’s Mid West has made a direct plea to West Australians to have faith the project will go ahead.

Asia Iron Australia chairman and vice-chairman of Chongqing Iron and Steel, Guo Deyong, has made clear his firm will continue with the proposed Extension Hill magnetite mine despite doubts being raised within WA about it.

Speaking to _WestBusiness _at the recently finished $US5.3 billion steel plant on the banks of the Yangtze River, Mr Guo said some of the doubts about the project seemed driven by concerns over the possible use of Chinese labour and a recent reorganisation of senior Australian staff.

But Mr Guo said the company, which already takes about seven million tonnes of WA iron ore a year, needed Extension Hill if its plans to increase steel output were to be fulfilled.
“Please have faith in us and our determination,” he said. “Don’t doubt our determination to build a mine in WA. We need to expand our mines in WA.”

This month, long-serving head of Asia Iron in Australia, Bill Mackenzie, was axed. Mr Guo became interim managing director in what he said at the time was an effort to “strengthen relationship with the Australian management team”. That fed into concerns about potential delays to Extension Hill and oversupply of steel across China.

But Mr Guo said the Chongqing State-owned enterprise was the most recent, and efficient, steel mill in China.

He said the Chongqing plant, moved about 100km out of the city to the nearby district of Chang Shou, had cutting-edge environmental and energy efficiency.

Company officials said much had been made of the changes in Australian head office staff but that was minor compared to the company’s plans to expand production largely off the back of WA iron ore.
The officials also rejected suggestions the project would be built largely by Chinese labour, saying Australians would be key to its construction.

Despite delays, Mr Guo said a final investment decision would be made by October next year with construction forecast to take three years. The company is hopeful of shifting its first Extension Hill ore to China by late 2017.

As profitability improved at the Chongqing plant, which produces almost nine million tonnes of steel a year, it would expand its mine in the Mid West, Mr Guo said.

The reporter is traveling in China as part of the Australia-China Journalist Exchange program

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