* CITIC says project moving into production phase
* Development is billions of dollars over budget, 4 yrs
* Has been marred by legal disputes
SYDNEY, Sept 30 China's CITIC Pacific
said it was moving into the initial production phase at its $8
billion iron ore project in Australia, following years of delays
at one of China's costliest offshore mining developments.
Already some four years behind schedule and billions of
dollars over budget, commissioning of the first of the project's
two production lines has been going on since July, CITIC said in
an e-mailed statement.
"We are now moving into the production stage," it said.
The project, one of the largest of its kind undertaken by a
Chinese entity outside China, has been marred by legal disputes.
It has yet to generate any returns six years after CITIC Pacific
bought the rights from Australian tycoon Clive Palmer, prompting
Beijing to take a much more cautious approach to approving
foreign mining investments.
CITIC last month said the focus over the next six months
would be to ensure the stable running of the first production
line and ramping it up to full capacity.
CITIC Pacific, controlled by state-owned CITIC Group
, had hoped to begin exporting iron ore in May. But
problems at its grinding mill, a component in the production of
the type of magnetite found in the far west Australian deposits
mined by the company, forced it to delay.
The development aims to produce up to 24 million tonnes of
iron ore concentrate annually. The material will be used by
CITIC Pacific's own steel plants and also sold to other steel
producers in China.
The cost of the project has swelled to almost $8 billion
from $2.5 billion.
(Reporting by James Regan; Editing by Joseph Radford)