In depth interpretation of the reasons for the re extension of China Australia iron ore project
in depth interpretation of the reasons for the re extension of China Australia iron ore project
China Construction machinery information
Guide: subject to the MCC China Australia iron ore project, it is located at the Fortescue estuary in Pilbara, Western Australia, 25 kilometers away from Preston point. CITIC Pacific has acquired the mining right of 2 billion tons of magnetite resources located in tenement. Through the exploration of the northwest area outside the existing exploration area, it is estimated that tenemen
subject to MCC
the Sino Australian iron ore project is located at the Fortescue estuary in Pilbara, Western Australia, 25 kilometers away from Cape Preston. CITIC Pacific has acquired the mining right of 2 billion tons of magnetite resources located in tenement. Through the exploration of the northwest region outside the existing exploration area, it is estimated that the resource stock in tenement may exceed 100 million tons, and the subscription volume of China can be as high as 4 billion tons
the project is the largest overseas iron ore production base fully controlled by Chinese enterprises, with complete independent pricing power. The whole production process includes mining, crushing and grinding, beneficiation, pressure filtration and other links, and then subdivided into dozens of steps, including crushing, self grinding, concentration and so on1. Whether the main machine is grounded
at present, the construction focus of the project is the installation of pipelines and electrical equipment in the plant, and the installation and sub item commissioning of pipelines, machinery and electrical equipment of the first production line will be completed before the end of the year. In order to ensure the production of beneficiation and the inspection of the environmental protection department, the project party is now installing the equipment of the tailings pond, with the goal of storing tailings for 3 to 5 years
by the end of September, the works of seawater desalination pipeline, slurry pipeline and backwater pipeline can be completed, and the previously exposed pipelines have now been buried. The four dehydration workshops to be completed in the second half of the year will ensure the dehydration capacity of six production lines. The single machine commissioning of Pit 1 crusher has been completed in August, and now we are waiting for the joint commissioning and testing of other supporting facilities, that is, MCC has not completed the control system in place
"the initial plan is that the first crusher will be put into trial operation in mid September 2010, and all four crushers will be put into trial operation by the end of December of that year." A staff member of CITIC Pacific told
the joint commissioning of the whole system was scheduled in July and August this year according to the original plan of CITIC Pacific. "Our goal can basically be achieved without the delay of the concentrator." Said a person in charge of the Australian iron ore project of CITIC Pacific
at present, power supply, water supply and commissioning conditions have been met from the port area to all system parts. However, the 20th Metallurgical Corporation of China Metallurgical Corporation is responsible for the concentrator part that leads to the delay of project construction. There are still a lot of detailed work to be done in the pipeline, electrical installation, cable and control system in some plants of the concentrator, which is due to the delay of the original design, procurement and logistics organization arrangement. It is reported that the first production line can be debugged at the end of the year, and there are still many links to be handled
it is understood that MCC, as the general contractor, is responsible for the design, procurement, construction and installation of primary crushing plant, concentrator, pellet plant, material delivery equipment, camp and related infrastructure. Now, due to the failure to complete the concentrator in his charge on time, the project party has to control the speed of mining, and the mining department actually has the conditions for normal mining
Huang Dan, vice president of MCC China, told: "the overspending is due to changes in the original engineering design and local policies in Australia, which should be subject to the announcement issued by our board office. Now the relevant departments are conducting a roadshow in Shanghai."
as of press time, MCC has not issued an announcement on the extension and capital increase requirements of its responsible part
a staff member of MCC who was close to the project told that after the project was launched, Australia soon organized its domestic experts to follow up and study the project from the beginning of the master plan. At the same time, Australia has high requirements on environmental protection. Before the project starts, it needs to pass the relevant research reports provided by independent consultants in Australia before it can be allowed to start, This led to hundreds of millions of dollars of consultancy fees added to the original budget of the whole project
from 2010 to the end of 2011, and then to the first half of 2012, CITIC Pacific Australia iron ore project (hereinafter referred to as China Australia iron ore project) has adjusted the production date of the first production line for several times
on July 15, CITIC Pacific announced its efforts to improve the safety level and overall quality of the chemical industry, saying that considering the time required for comprehensive operation and commissioning, CITIC Pacific expected that the production and export of concentrate powder of the above projects would be in the first half of 2012, later than the end of 2011 as originally planned. The reason is mainly caused by the lag in the construction of China Metallurgical Science and Industry Corporation (hereinafter referred to as MCC). MCC, the contractor of the project, asked CITIC Pacific to increase the project construction cost of about $900million, team Commission and other related expenses
on the other hand, from more than US $3 billion to US $5.2 billion in the past, to nearly HK $20 billion through various channels in 2011, CITIC Pacific has gradually increased the investment budget of the project. In fact, we learned that in 2010, CITIC Group had re estimated the budget of the project of US $5.2 billion
in this regard, Zhang Jijing, managing director of CITIC Pacific, said at the performance conference in the first half of 2011: "I underestimated the difficulties in the past, and now I don't want to make mistakes."
in order to ensure the smooth opening of the first production line of the Sino Australian iron ore project, CITIC Group has transferred candidates from various project departments around the world to enrich the Sino Australian iron ore project. However, the smooth opening of the first production line is also a trial operation section, and there will be many problems. The following production lines will advise users to regularly apply antirust oil and make adjustments according to the conditions of the first and second trial operation production lines
it is learned that the mining method adopted by the China Australia iron ore project is open-pit mining, with an annual mining of more than 80million tons of ore. The original design finally mineralized 27.6 million tons, with a stripping ratio of less than 0.7, and the beneficiation method is weak magnetic separation
due to lack of experience, Chinese enterprises' overseas investment projects often refer to some case samples of earlier domestic enterprises. The Sino Australian iron ore project refers to the feasible operation scheme of a 1 billion ton magnetite project of Shougang. However, there are great differences in environmental conditions and policies and regulations across the country. After the development of the Australian iron ore project, some unplanned variables have led to the extension of the construction period
Liu Yongshun, the former chief representative of the Chinese negotiating team for the benchmark price of iron ore of Baosteel Group, said that the China Australia iron ore project is currently the most mature and most operational project in China among overseas iron ore projects, but it still encounters many local problems in project construction
"because the local seabed is shallow and the stone is hard, the construction of a deep-water wharf that can berth large cargo ships requires a lot of channel construction and blasting work, with a long construction period and large investment." Liu Yongshun said, "now the iron ore products are basically transported by barge to the cargo ship docked more than 20 nautical miles away from the port." It is understood that the design scale of the port is 40million tons
a staff member participating in the China Australia project told: "the previous project evaluation often differs from the actual situation after the project starts. The input or construction period must be adjusted according to the actual situation, not to mention Australia, which is thousands of miles away from abroad."
before the start of the project, we have a simple understanding of the original ore body. The earlier investment and duration estimation are also based on this foundation, but the current calculation is based on the samples obtained after stripping. The difference between the previous and subsequent estimation standards leads to considerable differences in construction investment in raw materials, water and electricity
an insider of MCC told: "The local geological conditions are worse than previously expected, and the hardness of the plot is greater. It not only encounters many problems in construction, but also brings problems in ore mining and beneficiation, which requires longer grinding and beneficiation time. In order to ensure the preset annual output, the investor must ensure sufficient self grinding production lines, and all equipment conditions must meet the environmental protection standards of the local government. This standard is much higher than the domestic requirements, so it is also set up together The cost of equipment procurement has increased. The equipment of this project is basically purchased from abroad in US dollars, not RMB. "
for example, the underground water is less than expected and the water quality is poor, coupled with the increase of ore production, the mining area is far from the coast, and the local stones are hard, which leads to a significant increase in the construction cost of seawater desalination facilities. It is understood that the investment in this part is as high as nearly $400million
according to the above insider, except for the main subcontractor China Metallurgical Science and Industry Corporation, the design and construction of engineering parts of other relevant projects have been carried out by subcontractors with engineering experience at home and abroad. For example, Israel ide Technology Co., Ltd., the only supplier in the world that can provide two different desalination technologies and equipment, thermal method and membrane method, is responsible for the design and procurement of the desalination plant. The daily fresh water capacity of the desalination plant can reach 140000 tons, and the fresh water supply of the project after operation in the current period is 100000 tons; The design, procurement, construction and installation of the power plant are the responsibility of Australian energy and environmental protection company; The gas turbine is from Siemens; Mining equipment mainly comes from Terex, a company listed on the New York Stock Exchange with its headquarters in Westport, Connecticut, USA; The subcontractors of some port projects are basically in the charge of international companies, "such as Terex's large dump truck, which has a load capacity of 360 tons and wheels higher than people."
an insider of the China Development Bank told that the investor of the China Australia iron ore project had submitted a report to the relevant national departments on the project, which mentioned that the project was large-scale and had a long production process, including supporting facilities such as ports, roads, pipelines, desalination plants and power plants. At the same time, the expansion of production capacity, increased investment and being subject to Australia's environmental protection requirements had brought about the extension of construction period and financial pressure
among the supporting facilities, seawater desalination plants, port construction and power plants have the largest capital investment, with a scale of hundreds of millions of dollars. Under a series of domino effects, the investment in the project has been increasing. The estimated total investment in 2009 has reached $5.2 billion, while the initial total budget in 2006 was more than $3 billion
from the beginning of the project, with the change of investment and the extension of construction period, the financing drive brought by capital pressure has become a lingering "thought" on CITIC Pacific
at the semi annual report performance meeting of CITIC Pacific, Zhang Jijing, the managing director of CITIC Pacific, said that in April this year, CITIC Pacific issued US $1.25 billion (about HK $9.7 billion) of bonds, and recently issued another 1 billion yuan (about HK $1.2 billion). In addition, CITIC Pacific has agreed to sell its 50% equity of CITIC Guoan (9.49, -0.23, -2.37%) to CITIC Group, which will bring cash income of more than HK $4billion, CITIC Pacific will receive another HK $4.5 billion loan in the near future. A total of more than $2billion will be obtained
judging from the recent series of business restructuring of CITIC Pacific, the iron ore project will become the biggest beneficiary of this fund. However, due to MCC's request for CITIC Pacific to increase the project construction cost of $900million, financial pressure still exists
it is learned that at present, the HK $47.2 billion assets of CITIC Pacific iron ore mining project have been used as collateral, and at the same time, they are used for the construction of 11 ships transporting iron ore
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