November 29, 2016 / 6:01 PM / a year ago

CITIC aims to cut costs at Sino Iron project, ramp up output

LONDON, Nov 28 (Reuters) - CITIC Pacific Mining’s Sino Iron project in Western Australia is ramping up production and expects to export more than 10 million tonnes this year, its chairman said on Tuesday, adding the goal was to become the world’s lowest cost producer.

Chairman Zhang Jijing of CITIC Pacific Mining, a wholly-owned subsidiary of Hong Kong-listed CITIC, said production needed to be increased as quickly as possible to achieve economies of scale.

“Our objective is to become the lowest cost, large scale magnetite (iron ore) producer in the world,” he said at a mining conference in London.

Analysts have labelled it one of the world’s costliest mines and a commercial disaster by industry standards as it wrestled with budget over-runs and delays.

But for China, the Sino Iron project, is central to Beijing’s strategy, as its domestic industry dries up, to ease its dependence on the world’s dominant low cost iron ore producers, such as BHP Billiton and Rio Tinto .

CITIC Pacific shipped its first ore to one of its Chinese steel mills at the end of 2013.

Zhang said all six production lines have been commissioned, with the last one starting six months ago and the mine is ramping up production to export 10 million tonnes this year.

At full capacity, it would produce 24 million tonnes of iron ore a year, compared with the 1.5 billion-tonne world market. (Reporting by Barbara Lewis in London and Jim Regan in Sydney, editing by David Evans)

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