BEIJING Dec 17 Metallurgical Corp. of China Ltd (MCC) said on Monday that the unit running its Cape Lambert magnetite project in Australia will withdraw most of its Chinese staff as it struggles with rising costs.
MCC Australia Holding Pty Ltd will close its current office in the western city of Perth by the end of January, leaving no more than five people in a new smaller location to maintain its Australian mining licence, it said.
MCC agreed to buy the Cape Lambert magnetite project in 2008, but has been facing financial difficulties as costs rise.
The project is one of several Chinese-controlled projects in Australia that have faced soaring costs and delays, making China more cautious about iron ore investments overseas.
The company said its main task in 2013 is to find strategic partners for the Cape Lambert project.
Separately, the company said it aims to start trial output at a second production line at the $6.2-billion Sino iron ore project in Western Australia by mid-April next year.
The project, where MCC is a contractor for China's CITIC Pacific Ltd, is slated to have six lines in the future.
CITIC Pacific, a steel and property conglomerate controlled by China's state-owned CITIC Group, had previously delayed the start-up of the project after MCC missed a commitment to complete construction by the end of August as planned. (Reporting by Wan Xu and Jonathan Standing)